High International Institute of Tourism in Tangier

Administration and Management of Hospitality and Tourist

Companies

End of Studies Project

Theme:

Brand Management Process: How to Build, Measure

and Manage Brand Equity
Case study: McDonald’s, the Fast Food Super-Brand

Authors:
Abdelkader BOURBAB
Mohamed BOUKILI

Supervisor:
Mr. Abdessalam TALIBI

Academic year 2007-2008

 High International Institute of Tourism in Tangier

Administration and Management of Hospitality and Tourist

Companies

Brand Management Process: How to Build, Measure

and Manage Brand Equity
Case study: McDonald’s, the Fast Food Super-Brand

End of Studies Project

Authors:
Abdelkader BOURBAB
Mohamed BOUKILI

Supervisor:
Mr. Abdessalam TALIBI

Academic year 2007-2008

Abstract

Nowadays, the modern world marketplace is becoming more and more complex. The
volatility of economies and markets, the accelerating rate of turbulent change, the changing
needs of consumers, the relentless progress of technologies and innovations, and increasing
market fragmentation have caused the destruction of many products and companies all over
the world. Thus, to resist any kind of change, brand management seems to be an imperative.

We are in a world where parity is the norm. The availability of new technologies has
enabled companies to easily replicate the products, systems, services, and processes of others,
generating a huge strategic problem for businesses of differentiation. Added to this is the
rapidly decreasing life cycle of products, in some cases now down to a matter of weeks.

Strong brands alleviate these problems. They differentiate companies and products
from their competitors, make access to new markets and industries easier, provide returns on
investment worth multiples of the value of the net assets of businesses through an endless
stream profits, and – best of all – have no life cycle if they are looked and managed well.

In addition to that, we believe the route to corporate success in the future will be found
in developing brands that show more care. By this we mean that the “leading brands” in the
foreseeable future will be those that demonstrate not just social responsibility, but a real
willingness to care for people and the world in which we live. Great brands will be like great
people – those whom we respect for their humility, leadership, compassion, leading-edge
thinking, and the trust they place in consumers. Brands that reach such insights will, in return,
be a part of the lives of millions, admired for what they are and what they do. Brand Image
will become a much more determinant of success.

In this end of studies project report, we deal with brands – why they are important,
what they represent to consumers, and what should be done by firms to manage them
properly. Thus, we provide insights into how profitable brand strategies can be created by
building, measuring, and managing brand equity. Further, we study McDonald’s experience to
evaluate its strategy in terms of brand management.
Résumé

De nos jours, le marché mondial est devenu de plus en plus complexe. L’instabilité des
économies et des marchés, l’évolution rapide des besoins des consommateurs, le
développement sans précédent des progrès technologiques et des innovations, ainsi que la
fragmentation des marchés ont abouti au déclin de nombreux produits et à la ruine de
plusieurs entreprises et grosses structures partout dans le monde. Ainsi, et pour résister face à
toutes ces variables, la gestion de la marque semble être un impératif à mettre en priorité.

Nous sommes dans un monde où la parité constitue la norme. La disponibilité des

nouvelles technologies a permis aux entreprises de copier et d’imiter facilement les produits,
les systèmes, les services, et les processus des concurrents. De ce fait, un véritable problème
stratégique est à relever : l’indifférenciation ou encore la standardisation des produits. De
plus, le cycle de vie des produits est souvent court.

Les grandes marques allègent ce genre de problèmes. Elles différencient les

entreprises et les produits des autres concurrents, permettent facilement l’accès à des
nouveaux marchés et à des nouvelles branches d’activité, favorisent le retour sur
investissements à travers la maximisation des profits, et surtout n’ont pas de cycle de vie si
elles sont bien gérées.

De plus, nous crayons fortement que le succès de l’entreprise sur le long terme s’avère
impérativement lié à la gestion de la marque et aux attitudes développées vis-à-vis des
consommateurs. Les marques leaders seront forcément celles qui manifestent leurs intérêts
pour agir sur des causes à caractère communautaire. Il ne s’agit pas seulement d’une
responsabilité sociale, mais aussi d’une volonté réelle à agir positivement sur les relations
sociales et le monde dans lequel on vit. Les grandes marques sont comme les grandes
personnalités, on les respecte pour leur humilité, leadership, et leur façon d’agir. Ce sont des
marques qui, par conséquence, feront partie de la vie des millions de gens, elles sont admirées
pour ce qu’elles sont et ce qu’elles font. L’image de marque est devenue le critère de
succès.

Dans ce rapport de projet de fin d’études, nous traitons de la marque, son importance
pour les firmes, ce qu’elle représente pour les consommateurs, et ce qui doit être fait pour la
gérer convenablement. De ce fait, nous présentons les directives et les fondements de base
nécessaires pour construire, mesurer et gérer le capital marque. Finalement, nous analysons le
cas de McDonald’s et ses stratégies de marque.
Dedication
This work is dedicated:

To my mother: I love you my source of life.

To the memory of my father: you are always present in my mind.

To my beautiful sisters: I love you all.

To my little brother: Abderrahman you are the best!

To the sweet Kawtar.

To my brother-in-law: youssef

To all my friends, especially: Simo, Anas, Monsif, Amine, Ahmed, Ismail, Hsissou and Adil.

-Abdelkader-
Dedication

I want to dedicate this humble work:

To my parents who have taught me so much about life, love, and happiness.
To my lovely brother Mourad who lives in Italy, I miss you so much!
To all my sisters, you continue to make my heart feel good, and I look forward
to growing old together.
To my brother in low Hassan, you are really my best friend!
To Houda & Anas, I love you so much!
To AbdelKader, Your friendship was my greatest achievement in this life.
To Rajae, words are not expressive!
To all my real friends

-Mohamed-
Acknowledgment

First, we would like to express our deepest gratitude to Mr Talibi Abdessalam, our teacher,
friend and supervisor for his good suggestions, support, kindness, favour, generosity and
humour. We learn always new thinks from you teacher!

We would like to thank Mrs Hanane Boukili, from Al Akhawayn University, for her
precious help at the starting of this work, and particularly in providing us with the convenient
books and references.

A particular acknowledgement is for all our professors and teachers during these latter
four years during our studies within ISITT. They were an inexhaustible source of learning.

Our thoughts go to all those who have been a real help for us, especially our
administration staff members: Mr Mohtaj Abdelhaq, Mr Afqir Adnane and Mrs Karam Aziza.

Finally, our special thanks go to the students of AGETH II, for their continuous
support. We will never forget you.

Mohamed BOUKILI
& Abdelkader BOURBAB
Continents

Index of abbreviations P:
List of figures P:
General Introduction P:

I Fundamentals of Branding P:
1 …Opening Perspectives P:
Introduction P:
1.1 Definition P:
1.2 Brand versus products P:
1.3 Why do brands matter P:
1.4 Can anything be branded P:
1.5 Brand leadership P:
1.6 Historical origins of branding P:
Conclusion P:

2 …Understanding the Customer-based brand equity model P:

Introduction P:
2.1 Brand equity P:
2.2 Customer-Based Brand Equity P:
2.3 Brand knowledge P:
2.3.1 Brand Awareness P:
2.3.2 Brand Image P:
2.4 Building a Strong Brand P:
2.5 Brand Building Blocks P:
2.5.1 Brand Salience P:
2.5.2 Brand Performance P:
2.5.3 Brand Imagery P:
2.5.4 Brand Judgments P:
2.5.5 Brand Feelings P:
2.5.6 Brand Resonance P:
Conclusion P:
II Strategic Brand Management Process P:
3 …brand positioning and values P:
Introduction P:
3.1 Brand positioning P:
3.1.1 Target Market P:
3.1.2 Nature of competition P:
3.1.3 Points of Parity and points of Difference P:
3.2 Positioning guidelines P:
3.2.1 Defining and communicating the competitive frame of reference P:
3.2.2 Choosing and Establishing points of parity and points of difference P:
3.3 Brand Values P:
3.3.1 Core Brand Values P:
3.3.2 Brand Mantras P:
3.4 Internal Branding P:
Conclusion P:

4 …Brand Marketing Programs P:

Introduction P:
4.1 Choosing Brand Elements to Build Brand Equity P:
4.1.1 Criteria for choosing brand elements P:
4.1.2 Options for Brand Elements P:
4.1.3 Putting It All Together P:
4.2 Designing Marketing Programs to Build Brand Equity P:
4.2.1 Personalized Marketing as a new perspective P:
4.2.2 Product Strategy P:
4.2.3 Pricing Strategy P:
4.2.4 Channel strategy P:
4.3 Integrating Marketing Communications to Build Brand Equity P:
4.3.1 Overview of Marketing Communication options P:
4.3.2 Developing Integrated Marketing Communication Programs P:
4.4 Leveraging Secondary Brand Knowledge to Build Brand Equity P:
4.4.1 Creation of New Brand Associations P:
4.4.2 Effects on Existing Brand Knowledge P:
4.4.3 Co-Branding Case P:
Conclusion P:

5 …Measuring Brands P:
Introduction P:
5.1 The brand value chain P:
5.1.1 Marketing Program Investment P:
5.1.2 Customer Mindset P:
 5.1.3 Shareholder Value P:
5.2 Brand Tracking Studies P:
5.2.1 What to track P:
5.2.2 How to Conduct Tracking Studies P:
5.2.3 How to Interpret Tracking Studies P:
Conclusion P:

6 …Implementing Branding Strategies P:

Introduction P:
6.1 The Brand-Product Matrix P:
6.1.1 Breadth of a Branding Strategy P:
6.1.2 Depth of a branding strategy P:
6.2 Brand hierarchy P:
6.2.1 Corporate or company level P:
6.2.2 Family brand level P:
6.2.3 Individual brand level P:
6.2.4 Modifier level P:
6.3 Designing a branding strategy P:
6.3.1 Number of levels of the brand hierarchy P:
6.3.2 Desired awareness and image at each hierarchy level P:
6.3.3 Combining brand elements from different levels P:
6.3.4 Linking brand elements to multiple products P:
Conclusion P:

7 …Brand Extensions P:
Introduction P:
7.1 Advantages of extensions P:
7.2 Disadvantages of brand extensions P:
7.3 Consumer’s brand extensions evaluation P:
7.4 Brand extension opportunities: P:
7.5 Extension Guidelines: P:
Conclusion P:

8 …Managing Brands over Time and Markets P:

Introduction P:
8.1 Managing brands over time P:
8.1.1 Reinforcing brands P:
8.1.2 Revitalizing brands P:
8.2 Managing brands over markets P:
8.2.1 Advantages of global marketing programs P:
8.2.2 Disadvantages of global marketing programs P:
8.2.3 Standardization versus customization P:
8.2.4 Building global customer-based brand equity P:
Conclusion P:
III McDonald’s, the Fast Food Super-Brand P:

Introduction P:

9 … McDonald’s Corporation Presentation

9.1 History P:
9.2 Corporate overview P:
9.2.1 McDonald's Corporation's business model P:
9.2.2 Products P:
9.2.3 Trademarks P:
9.2.4 Advertising P:
9.3 McDonald's global brand strategy P:
9.3.1 Evolution of the brand P:
9.3.2 McDonald’s brand communication P:
9.3.3 The strength of franchising P:
9.3.4 McDonald’s brand as a living process P:

10 … The questionnaire results, analysis and discussion P:

10.1 Characteristics of the respondents P:
10.2 Brand-related consumer behavior P:
10.3 Brand Awareness P:
10.4 Brand image P:
10.4.1 Brand strength P:
10.4.2 Brand uniqueness P:
10.4.3 Brand favorability P:

Conclusion P:

General Conclusion P:

Bibliography P:
Appendices P:
 Brand Management Process ISITT

Index of abbreviations
 CBBE: Customer-Based Brand Equity
 IMC: integrated marketing communication
 EDLP: Everyday low pricing
 ROQ: return on quality
 TQM: total quality management
 URLs: Uniform Resource Locators
 B2E: business to employee
 POPs: points of parity
 PODs: points of difference
 CSR : Corporate Social Responsibility
 EFTA: European Free Trade Association
 QSRs: Quick Service Restaurants

List of figures

Figure 2.1: Consumer Reasons for Brand Choice P: 13

Figure 2.2: Possible Apple Computer Associations P: 14
Figure 2.3: Customer-Based brand Equity Pyramid P: 16
Figure 3.1: Consumer segmentation bases P: 22
Figure 3.2: Business-to-business segmentation bases P: 22
Figure 3.3: Examples of Negatively Correlated Attributes and Benefits P: 24
Figure 4.1: Critiques of Brand Element Options P: 31
Figure 4.2: Simple Test for Marketing Communication Effectiveness P: 37
Figure 4.3: Advertising Media Characteristics P: 38
Figure 4.4: Advantages and Disadvantages of Co-branding P: 42
Figure 5.1: The Brand Value Chain P: 45
Figure 5.2: Brand Context Measures P: 51
Figure 6.1: Brand-Product matrix Figure 6.2: Category Attractiveness Criteria P: 54
Figure 6.3: Possible Special Roles of Brands in the Brand Portfolio P: 56
Figure 6.4: Kapferer’s Branding System P: 58
Figure 6.5: Determinants of Corporate Image P: 60
Figure 6.6: Guidelines of brand hierarchy decisions P: 61
Figure 7.1: Ansoff’s Growth Share Matrix P: 63
Figure 7.2: Advantages of Brand Extension P: 66
Figure 7.3: Disadvantages of Brand Extension P: 67
Figure 9.1: McDonald’s Corporate Presentation P: 68
Figure 9.2: McDonald’s Global Locations P: 85
Figure 10.1: Top fast food brands ranking P: 89
Figure 10.2: U.S. Brands Likability P: 105

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 Brand Management Process ISITT

“A brand is a set of differentiating promises

that link a product to its customers.”
Stuart Arges, Young & Rubicam

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 Brand Management Process ISITT

General Introduction
It is surprising that many companies still pay little attention to the management of their brands,
compared to the meticulous way in which they manage other aspects of their business. One
reason for this might be that in many parts of the world, brand management is still fairly new to
marketers. In Asia, for example, it’s only recently that the power of branding has been
understood, and there are many young people who find themselves in senior positions having
had little brand management experience. Not that this situation is peculiar to the Far East.
Branding itself is still an evolutionary concept, and the techniques associated with managing
brands are also developing.

Most companies are in crisis! The accessibility of new technologies has enabled
companies to easily replicate the products, services, systems, and processes of others, generating
a huge strategic problem for businesses of differentiation. Products and brands offered for
consumers are almost always the same! No differences occur to enhance the competitive
advantage. Thus, an obvious question is: How to fight brand indifferentiation?

The purpose of the study is to highlight the role of careful brand management in creating
powerful brands that last for years. The study provides a comprehensive guide to the different
elements involved in brand management.

To fight indifference, Brand management should fulfill three basic objectives:

information, differentiation, and seduction.

Information because it should tell us something about the product offered that is intangible and
decipherable: I have to understand the proposal of basic value or what the product offered consist
of.

Differentiation because what it tells us should be perceived as different by the purchaser or, in
other words: I understand what you are telling me and I think that it is something that the others
haven’t told me.

Seduction because this is the reason d’être of any brand. The first two are in the service of the
third: in the end a brand has to tell us something that we consider to be interesting and that ends
up seducing us. And seduction is something very subtle.

In order to get a broad insight and a comprehensive overview of the research subject, the report
will primarily take on a theoretical approach that provides theories and framework for brands
and strategic implications involved in the process of branding. Further, we focus on a practical
approach to verify how brand management is effective for firms.

Along this report, we present different steps of development of leading brand strategies.

This report begins with an initiation into fundamentals of branding, giving a brief
terminology that helps the reader to understand the language of branding. The first part
introduces one particular view – the concept of customer-base brand equity (CBBE) – that will
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serve as the organizing framework for the rest of the book. It presents the CBBE model in detail
and discusses some of the main implications of that model.

In the second part, we analyze the outcomes arising from the marketing programs that are
able to register the brand in memory and link it to strong, favorable and unique associations.
Marketing programs deals with product, pricing, distribution, and communication strategies and
their role in building brand equity.

Then we move to the measurement system design description. This chapter takes a
detailed look at what consumers know about brands, what marketers want them to know, and
how marketers can develop measurement procedures to assess how well they are doing. Next, we
examine brand value chain, brand equity measurement system, approaches to measure
customer’s brand knowledge structures, and potential outcomes of brand equity. Moreover, we
will describe branding strategies related to brand-product matrix, brand hierarchy, and brand
extensions.

Further, we explain how brands and products must be effectively managed over time and
target market segments by creating brand awareness and a positive brand image. Finally, we start
with the description of the McDonald’s corporation and its global brand strategy. After, we
explain how it needs to be constantly reassessed, in terms of fixing on the best course of action
for its brand in particular markets, based on an analysis of the relevant customers’ perception of
the brand.

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 Brand Management Process ISITT

Part I
Fundamentals of branding

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 Brand Management Process ISITT

Chapter 1
Opening Perspectives

Introduction
This first Chapter defines what a brand is. It considers the functions of a brand from the
perspective of both consumers and firms and why brands are important to both. It considers what
can and cannot be branded and identifies brand leadership. The chapter concludes with an
overview of the historical origins of branding.

1.1 Definition
The American Marketing Association describes a brand as a “name, term, sign, symbol, or
design, or a combination of them, intended to identify the goods and services of one seller or
group of sellers and to differentiate them from those of competition.” Technically speaking, then,
whenever a marketer creates a new name, logo, or symbol for a new product, he or she has
created a brand.

It should be recognized that many practicing managers, however, refer to a brand as more
than that – defining a brand in terms of having actually created a certain amount of awareness,
reputation, prominence, and so on in the marketplace.

1.2 Brands versus products

It’s important to contrast a brand and a product. According to Phillip Kotler, a well regarded
marketing academic, a product is anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a need or want.
A brand is therefore a product, but one that adds other dimensions that differentiate it in
some way from other products designed to satisfy the same need. These differences may be
rational and tangible – related to product performance of the brand – or more symbolic,
emotional, and intangible – related to what the brand represents.

1.3 Why do brands matter

An obvious question is why are brands important? What functions do they perform that make
them so valuable to marketers? One can take a couple of perspectives to uncover the value of
brands to both consumers and firms themselves.
This is an overview of the different roles that brands play for these two parties.

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Consumers

 Identification of source of product

 Assignment of responsibility to product maker
 Risk reducer
 Search cost reducer
 Promise, bond, or pact with maker of product
 Symbolic device
 Signal of quality

Manufacturers

 Means to identification to simplify handling or tracing

 Means of legally protecting unique features
 Signal of quality level to satisfied customers
 Means of endowing products with unique associations
 Source of competitive advantage
 Source of financial returns

1.4 Can anything be branded

Branding involves creating mental structures and helping consumers organize their knowledge
about products and services in a way that clarifies their decision making and, in the process,
provides value to the firm. The key to branding is that consumers perceive differences among
brands in a product category.
Over the years, a number of products that at one time were seen as essentially
commodities have become highly differentiated as strong brands have emerged in the category 1.
Marketers convinced consumers that a product was not a commodity and actually could vary
appreciably in quality. In these cases, brands have been created by image or other non-product-
related considerations.
Generally speaking, all products can be branded. This includes:
 Physical Goods
 Services
 Retailers and Distributors
 Online Products and Services
 People and Organizations
 Sports, Arts, and Entertainment
 Geographic Locations
 Ideas and Causes

1
Levitt, ‘’Marketing Success. ‘’
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 Brand Management Process ISITT

1.5 Brand leadership

Leadership is part of the core identity for many brands, especially corporate brands, and with
good reason. It can inspire employees and partners by setting a high brand aspiration level; the
goal of being out in front makes the brand-building task exciting and worthwhile. For many
customers, a leadership brand provides reassurance, while for others it implies quality and/or
innovation that translates into solid functional benefits. Buying and using a true leadership brand
also delivers self-expressive benefits – a feeling of importance and the satisfaction of having
good judgment.

At the end of this dissertation, there will be a special report that reveals Business Week’s
ranking of the world’s 100 most valuable brands based on Interbrand’s brand valuation
methodology.

1.6 Historical origins of branding

The word brand comes from the Old Norse brandr, meaning to burn, and from these origins
made its way into Anglo-Saxon. It was of course by burning that early man stamped ownership
on his livestock, and with the development of trade buyers would use brands as a means of
distinguishing between the cattle of one farmer and another. A farmer with a particularly good
reputation for the quality of his animals would find his brand much sought after, while the brands
of farmers with a lesser reputation were to be avoided or treated with caution. Thus the utility of
brands as a guide to choice was established, a role that has remained unchanged to the present
day.

Some of the earliest manufactured goods in mass production were clay pots, the remains
of which can be found in great abundance around the Mediterranean region, particularly in the
ancient civilizations of Etruria, Greece and Rome. There is considerable evidence among these
remains of the use of brands, which in their earliest form were the potter’s mark. A potter would
identify his pots by putting his thumbprint into the wet clay on the bottom of the pot or by
making his mark: a fish, a star or cross, for example. From this we can safely say that symbols
(rather than initials or names) were the earliest visual form of brands.

In Ancient Rome, principles of commercial law developed that acknowledged the origin
and title of potters’ marks, but this did not deter makers of inferior pots from imitating the marks
of well-known makers in order to dupe the public. In the British Museum there are even
examples of imitation Roman pottery bearing imitation Roman marks, which were made in
Belgium and exported to Britain in the first century AD. Thus as trade followed the flag – or
Roman Eagle – so the practice of unlawful imitation lurked close behind, a practice that remains
commonplace despite the strictures of our modern, highly developed legal systems.

With the fall of the Roman Empire, the elaborate and highly sophisticated system of trade
that had bound together in mutual interdependence the Mediterranean and west European
peoples gradually crumbled. Brands continued to be used but mainly on a local scale. The
exceptions were the distinguishing marks used by kings, emperors and governments. The fleur-
de-lis in France, the Hapsburg eagle in Austria-Hungary and the Imperial chrysanthemum in
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Japan indicated ownership or control. (Interestingly, the chrysanthemum signifies death in

Korea, intermittently over the centuries a Japanese colony.)
In a similar fashion the cockleshell, derived from the legend attached to the shrine of St.
James at Santiago de Compostella in northwest Spain, a favorite medieval center of pilgrimage
when the holy places of Palestine were closed to pilgrims by the Muslims was widely used in
pre-Renaissance Europe as a symbol of piety and faith. In the 17th and 18th centuries, when the
volume manufacture of fine porcelain, furniture and tapestries began in France and Belgium –
largely because of royal patronage – factories increasingly used brands to indicate quality and
origin. At the same time, laws relating to the hallmarking of gold and silver objects were
enforced more rigidly to give the purchaser confidence in the product.

However, the widescale use of brands is essentially a phenomenon of the late 19th and
early 20th centuries. The industrial revolution, with its improvements in manufacturing and
communications, opened up the Western world and allowed the mass-marketing of consumer
products. Many of today’s best-known consumer brands date from this period: Singer sewing-
machines, Coca-Cola soft drinks, Bass beer, Quaker oats, Cook’s tours, Sunlight soap, Shredded
Wheat breakfast cereal, Kodak film, American Express travelers’ checks, Heinz baked beans and
Prudential Insurance are just some examples.

Hand in hand with the introduction of these brands came early trademark legislation. This
allowed the owners of these brands to protect them in law (indeed, the Bass “Red Triangle”
trademark was the very first registered in the UK in 1876, and the beaming Quaker, who adorns
the pack of the eponymous oats, is now well into his second century). The birth of advertising
agencies such as J. Walter Thompson and NW Ayer in the late 19th century gave further impetus
to the development of brands.

But it is the period since the end of the Second World War that has seen the real
explosion in the use of brands. Propelled by the collapse of communism, the arrival of the
Internet and mass broadcasting systems, and greatly improved transportation and
communications, brands have come to symbolize the convergence of the world’s economies on
the demand-led rather than the command-led model. But brands have not escaped criticism.
Recent anti-globalization protests have been significant events. They have provided a timely
reminder to the big brand owners that in the conduct of their affairs they have a duty to society,
as well as customers and shareholders.

Conclusion
Brand is a powerful tool if understood and properly managed. It gives companies longevity and
the potential for immortality. In the next chapter, we will examine brand equity concept,
introducing one particular view – the concept of customer-based brand equity – that will serve as
the organizing framework for the rest of the report.

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 Brand Management Process ISITT

Chapter 2
Understanding the Customer-based brand
equity model

Introduction
Two questions often arise regarding brands: what makes a brand strong? And how do you
build a strong brand? To help answer both of these questions, this section introduces the
customer-based brand equity (CBBE) model. This model incorporates recent theoretical
advances and managerial practices in understanding and influencing consumer behavior.
Although a number of useful perspectives concerning brand equity have been put forth. The
CBBE model provides a unique point of view as to what brand equity is and how it should best
be built, measured, and managed.

2.1 Brand Equity

Brand equity is the commercial value of all associations and expectations (positive and negative)
that people have of an organization and its product and services due to all experiences of,
communications with, and the perceptions of the brand over time. This value can be measured in
several ways: as the economic value of the brand asset itself, as the price premium (to the end
consumer or the trade) that the brand commands, as the long term consumer loyalty the brand
evokes, or as the market share gains it results in, among many others. From an economist’s
perspective, brand equity is the power of the brand to shift the consumer demand curve of a
product or service (to achieve a price premium or a market share gain).

2.2 Customer-Based Brand Equity

The CBBE model approaches brand equity from the perspectives of the consumer-whether it be
an individual or an organization. Understanding the needs and wants of consumers and devising
products and programs to satisfy them are at the heart of successful marketing. In particular, two
fundamentally important questions faced by marketers are: what do different brands mean to
consumers? And how does the brand knowledge of consumers affect their response to marketing
activity?

Customer-based brand equity is formally defined as the differential effect that brand
knowledge has on consumer response to the marketing of that brand.

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 Brand Management Process ISITT

There are three key ingredients to this definition: (1) “differential effect,” (2) “brand
knowledge,” (3) “consumer response to marketing.” First, brand equity arises from differences in
consumer response. If no differences occur, then the brand name product can essentially be
classified as a commodity or generic version of the product. Competition, most likely, would
then just be based on price. Second, these differences in response are a result of consumers’
knowledge about the brand, that is, what customers have learned, felt, seen, and heard about the
brand as a result of their experiences over time. Thus, although strongly influenced by the
marketing activity of the firm, brand equity ultimately depends on what resides in the mind of
consumers. Third, the differential response by consumers that makes up the brand equity is
reflected in perceptions, preferences, and behavior related to all aspects of the marketing of a
brand (e.g., choice of a brand, recall of copy points from an ad, actions in response to a sales
promotion, or evaluations of a proposed brand extension).

2.3 Brand knowledge

From the perspective of the CBBE model, brand knowledge is the key to creating brand equity,
because it creates the differential effect that drives brand equity. What marketers need, then, is an
insightful way to represent how brand knowledge exists in consumer memory. An influential
model of memory developed by psychologists is helpful in that regard 2. The associative network
memory model views memory as consisting of network of nodes and connecting links, in which
nodes represent stored information or concepts. Any type of information that is verbal, visual,
abstract, or contextual in nature.

Consistent with the associative network memory model, brand knowledge is

conceptualized here as consisting of a brand node in memory with a variety of associations
linked to it. In particular, brand knowledge can be characterized in terms of two components:
brand awareness and brand image.

2.3.1 Brand Awareness

Brand awareness consists of brand recognition and brand recall performance. Brand recognition
relates to consumers’ ability to confirm prior exposure to the brand when given the brand as a
cue. In other words, brand recognition requires that consumers can correctly discriminate the
brand as having been previously seen or heard. For example, when consumers go to the store, it
is the case that they will be able to recognize the brand as one to which they have already been
exposed? Brand recall relates to consumers’ ability to retrieve the brand from the memory when
given the product category, the needs fulfilled by the category, or a purchase or usage situation
as a cue. In other words, brand recall requires that consumers correctly generate the brand from
memory when given a relevant cue. For example, recall of Kellogg’s Corn Flakes will depend on
consumers’ ability to retrieve the brand when they think of the cereal category or of what they
should eat for breakfast or eat for a snack, either at the store(when making a purchase), at
home(when making a consumption choice), or wherever. Brand awareness also involves linking
the brand – the brand name, logo, symbol and so forth – to certain associations in memory. In
particular, building brand awareness involves helping customers to understand the product
category in which the brand competes.

2
John R. Anderson, the Architecture of cognition (Cambridge, MA: Harvard University Press, 1983); Robert S.
Wyer Jr. and Thomas K. Sully, “Person Memory and Judgment,” Psychological Review 96, no. 1 (1989):1-29.
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 Brand Management Process ISITT

Awareness is created by increasing the familiarity of the brand through repeated

exposure (for brand recognition) and strong associations with the appropriate product category or
other relevant purchase or consumption cues (for brand recall).

2.3.2 Brand Image

Brand image is the totally of perceptions resulting from all experience with and knowledge of the
brand. It’s how consumers perceive the brand. A positive brand image is created by marketing
programs that link strong, favorable, and unique associations.

Strength of Brand Associations

Making sure that associations are linked sufficiently strongly to the brand will depend on how
the marketing program and other factors affect consumer’s brand experiences. Associations will
vary in the strength of their connection to the brand node. Strength is a function of both the
amount, or quantity, of processing that information receives as well as the nature, or quality, of
that processing. The more deeply a person thinks about product information and relates it to
exciting brand knowledge. The stronger the resulting brand associations. Two factors facilitating
the strength of association to any piece of information are the personal relevance of the
information and the consistency with which this information is presented over time. The
particular associations that are recalled and salient will depend not only on the strength of
association, but also on the context in which the brand is considered and the retrieval cues that
are present that can serve as reminders. This section considers the factors that, in general, affect
the strength and recallability of a brand association.

As note earlier, consumer beliefs about brand attributes and benefits can be formed in
different ways. Brand attributes are those descriptive features that characterize a product or
service. Brand benefits are the personal value and meaning that consumers attach to the product
or service attributes. In general, the source of information creating the strongest brand attribute
and benefit associations is direct experience. This type of information can be particularly
influential in consumers’ product decisions, as long as consumers are able to accurately interpret
their experiences. As Figure 2-1 Shows, according to at least one consumer survey, knowing
what to expect from a product because of past experience was most common reason for buying a
particular brand. The next strongest associations are likely to be formed on the basis of word of
mouth (friends, family, etc.) or other noncommercial sources of information (consumer unions,
the popular press, etc.). Word of mouth is likely to be particularly important for restaurants,
entertainment, banking, and personal services. Company-Influenced sources of information, such
as advertising, are often likely to create the weakest associations and thus may be the most easily
changed.

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 Brand Management Process ISITT

FIGURE 2.1: Consumer Reasons for Brand Choice

Favorability and Uniqueness of Brand Associations

Choosing which favorable and unique associations to link to the brand requires careful analysis
of the consumer and competition to determine the optimal positioning for the brand. In the most
basic sense, favorable brand associations are created by convincing consumers that the brand
possesses relevant attributes and benefits that satisfy their needs and wants, such that they form
positive overall brand judgments. Thus, favorable associations for a brand are those associations
that are desirable o consumers and are successfully delivered by the product and conveyed by the
supporting marketing program for the brand (e.g., such that the brand is seen as highly
convenient, reliable, effective, efficient, colorful, and so on).

Brand associations may or may not be shared with other competing brands. The essence
of brand positioning is that the brand has a sustainable competitive advantage or “unique selling
preposition” that gives consumers a compelling reason why they should buy that particular
brand 3. These differences may be communicated explicitly by making direct comparisons with
competitors, or may be highlighted implicitly without stating a competitive point of reference.

3
David A. Aaker, ‘’Positioning Your Brand, ‘’ Business Horizons 25 (May/June 1982): 56-62; Al Ries and Jack
Trout, Positioning: The Battle for Your Mind (New York, McGraw-Hill, 1979); Yoram Wind, Product Policy:
Concepts, Methods, and Strategy (Reading, MA: Addison-Wesley, 1982).
13
 Brand Management Process ISITT

Furthermore, they may be based on product-related attributes or benefits. In fact, in many

categories-product-related attributes, such as user type or usage situation, may more easily create
unique associations.

The existence of strongly held, favorably evaluated associations that are unique to the
brand and imply superiority over other brands is critical to a brand’s success. Yet, unless the
brand faces no competition, it will most likely share some associations with other brands. Shared
associations can help to establish category membership and define the scope of competition with
other products and services 4.

In short, to create the differential response that leads to consumer-based brand equity, it’s
important that some of the strongly held associations are not only favorable but also unique.
Unique brand associations are distinct associations not shared with competing brands. Beliefs
about unique attributes and benefits for brands that consumers value more favorably than
competitive brands can lead to a greater likelihood of the consumers choosing the former brands.

Thus, it’s important to associate unique, meaningful points of difference to the brand to
provide a competitive advantage and “reason why” consumers should buy it.

Generally speaking, Customer-based brand equity occurs when the consumer has a high
level of awareness and familiarity with the brand and holds some strong, favorable, and unique
brand associations in memory. For example, Apple has been able to achieve a rich brand image
made up of a host of brand associations in the minds of at least some consumers. Associations
such as “user friendly,” “creative,” “for desktop publishing,” “used at many schools,” and so
forth. Figure 2-2 displays some commonly mentioned associations that came to mind for you
would make up your brand image for Apple.

FIGURE 2.2 : Possible Apple Computer Associations

4
Deborah J. MacInnis and Kent Nakomoto, ‘’Factors That Influence Consumers’ Evaluations of Brand Extensions,”
working paper, Karl Eller School of Management, University of Arizona, 1991; Mita Sujan and James R. Bettman,
“The Effects of Brand Positioning Strategies on Consumers’ Brand and Category Perceptions: Some Insights from
Schema Research,” Journal of Marketing Research 26 (November 1989): 454-467.
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 Brand Management Process ISITT

2.4 Building a Strong Brand

Building a strong brand, according to the CBBE model, can be thought of in terms of a sequence
of steps, in which each step is contingent on successfully achieving the previous step. All the
steps are as follows:
1) Ensure identification of the brand with customers and an association of the brand in
customer’s minds with a specific product class or customer need.

2) Firmly establish the totality of brand meaning in the minds of customers by strategically
linking a host of tangible and intangible brand associations with certain properties.

3) Elicit the proper customer responses to this brand identification and brand meaning.

4) Convert brand response to create an intense, active loyalty relationship between

customers and the brand.

These four steps represent a set of fundamental questions that customers invariably ask
about brands – at least implicitly if not even explicitly – as follows (with corresponding brand
steps in parentheses).
1. Who are you? (Brand identity)

2. What are you? ( Brand meaning)

3. What about you? What do I think or feel about you? (Brand responses)
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 Brand Management Process ISITT

4. What about you and me? What kind of associations and how much of a connection would
I like to have with you? (Brand relationship)

There is an obvious ordering of the steps in this “branding ladder,” from identity to meaning
to responses to relationships. That is, meaning cannot be established unless identity has been
created; responses cannot occur unless the right meaning has been developed; and a relationship
cannot be forged unless the proper responses have been elicited.

2.5 Brand Building Blocks

Performing the four steps to create the right brand identity, brand meaning, brand responses, and
brand relationship is a complicated and difficult process. To provide some structure, it is useful
to think of sequentially establishing six “brand building blocks” with customers. To connote the
sequencing involved, these brand building blocks can be assembled in terms of a brand pyramid.
Creating significant brand equity involves reaching the pinnacle of the CBBE brand pyramid and
will only occur if the right building blocks are put into place. This brand building process is
illustrated in figure 2.3, and each of these steps and corresponding brand building blocks are
examined in the following section.

Figure 2.3: Customer-Based brand Equity Pyramid

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 Brand Management Process ISITT

INTENSE, ACTIVE
LOYALTY

POSITIVE,
ACCESSIBLE
REACTIONS

POINTS-OF-
PARITY AND
POINTS-OF
DIFFERENCE

DEEP, BROAD
BRAND
AWARENESS

2.5.1 Brand Salience

Achieving the right brand identity involves creation brand salience with customers. Brand
salience relates to aspects of the awareness of the brand, for example, how often and easily the
band is evoked under various situations or circumstances. To what extent is the brand top-of-
mind and easily recalled or recognized? What types of cues and reminders are necessary? How
pervasive is this brand awareness?

Brand awareness can be characterized according to depth and breadth. The depth of brand
awareness concerns the likelihood that a brand element will come to mind and the ease with
which it does so. For example, a brand that can be easily recalled has a deeper level of brand
awareness than one that only can be recognized. The breadth of brand awareness concerns the
range of purchase and usage situations in which the brand element comes to mind. The breadth
of brand awareness depends to a large extent on the organization of brand and product
knowledge in memory.

In some cases, the best route for improving sales of a brand is not by improving
consumer attitudes toward the brand but, instead, by increasing the breath of brand awareness
and situations in which consumers would consider using the brand.

2.5.2 Brand Performance

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Brand performance relates to the way in which the product or service attempts to meet
customers’ more functional needs. Thus, brand performance refers to the intrinsic properties of
the brand in terms of inherent product or service characteristics. How well does the brand rate on
objective assessments of quality? To what extent does the brand satisfy utilitarian, aesthetic, and
economic customer needs and wants in the product or service category?

The specific performance attributes and benefits making up functionality will vary widely by
category. Nevertheless, there are five important types of attributes and benefits that often
underlie brand performance, as follows 5:
1. Primary ingredients and supplementary features
2. Product reliability, durability, and serviceability
3. Service effectiveness, efficiency, and empathy
4. Style and design
5. Price

2.5.3 Brand Imagery

Brand imagery deals with the extrinsic properties of the product or service, including the way in
which the brand attempts to meet customers’ psychological or social needs. Brand imagery is
how people think about a brand abstractly, rather than what they think the brand actually does.
Thus, imagery refers to more intangible assets of the brand. Many kinds of intangibles can be
liked to a brand, but four categories can be highlighted:
1. User profiles
For example, Marlboro cigarettes have more “masculine” associations.
2. Purchase and usage situations
For example, Domino’s was known for delivery and Pizza Hut for dine-in service.
3. Personality and values
For example, a brand, like a person, can be characterized as being “modern,” “old-
fashioned,” “lively,” “exotic,” etc.
4. History, heritage, and experiences
For example, there may be associations to aspects of the marketing program for the
brand, for instance, the color of the product or look of its package.

2.5.4 Brand Judgments

Brand judgments focus on consumer’s personal opinions and evaluations with regard to the
brand. Brand judgments involve how customers put together all the different performance and
imagery associations of the brand to form different kinds of opinions. Customers may make al
types of judgments with respect to a brand, but in terms of creating a strong brand, four types of

5
David Garvin, ‘’Product Quality: An Important Strategic Weapon,’’ Business Horizons 27 (May-June): 40-43;
Phillip Kotler, Marketing Management, 10th ed. (Upper Saddle River, NJ: Prentice-Hall, 2000).
18
 Brand Management Process ISITT

summary brand judgments are particularly important: quality, credibility, consideration, and
superiority.
Brand Quality: Brand attitudes are defined in terms of consumers’ overall evaluations of a
brand.
Brand Credibility: Brand credibility refers to the extent to which the brand as a whole is seen as
credible in terms of three dimensions: perceived expertise (is the brand seen as competent,
innovative, and a market leader?), trustworthiness (is the brand seen dependable and keeping
customer interests in mind?), and likability (is the brand seen as fun, interesting, and worth
spending time with?).
Brand Considerations: Consideration depends on how personally relevant consumers find the
brand, that is, the extent to which customers view the brand as being appropriate and meaningful
to themselves. Consideration depends also in large part on the extent to which strong brand and
favorable brand associations can be created as part of the brand image.
Brand superiority: Superiority relates to the extent to which customers view the brand as
unique and better than other brands. In other words, do customers believe that the brand offers
advantages that other brands cannot?

2.5.5 Brand Feelings

Brand feelings relates to the social currency evoked by the brand. What feelings are evoked by
the marketing program for the brand or by other means? How does the brand affect customer’s
feelings about themselves and their relationship with others?

The following are six important types of brand-building feelings 6.

1. Warmth: Consumers may feel sentimental, warmhearted, or affectionate about the brand

2. Fun: The brand makes consumers feel amused, lighthearted, joyous, playful, cheerful, and
so on.

3. Excitement: The brand makes consumers feel energized, cool, sexy and so on.

4. Security: The brand produces a feeling of safety, comfort, and self-assurance.

5. Social approval: Consumers feel that others look favorably on their appearance, behavior,
and so on.

6.Self-respect: The brand makes consumers feel a sense of pride, accomplishment, or

fulfillment.

2.5.6 Brand Resonance

Brand Resonance refers to the nature of the relationship that the consumer has with the brand.
Resonance is characterized in terms of intensity, or the depth of the psychological bond that
customers have with the brand, as well as the level of activity engendered by this loyalty (e.g.,
repeat purchase rates and the extent to which customers seek out brand information, events, and
other loyal customers). Specifically, brand resonance can be broken down into four categories:

6
Lynn R. kahle, Basil Poulos, and Ajay Sukhdial, ‘’Changes in Social Values in the United States during the Past
Decade,’’ Journal of Advertising Research (February/March 1988) : 35-41
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 Brand Management Process ISITT

1. Behavioral loyalty
2. Attitudinal attachment
3. Sense of community
4. Active engagement

Conclusion
The customer-based brand equity (CBBE) model lays out a series of steps for building a strong
brand:(1) Establish the proper brand identity, (2) create the appropriate brand meaning,(3) elicit
positive brand responses, and (4) forge strong brand relationships with consumers. The CBBE
model maintains that six brand building blocks – brand salience, brand performance, brand
imagery, brand judgments, brand feelings, and brand resonance – provide the foundation of
successful brand development.

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Part II
Strategic Brand Management
Process

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 Brand Management Process ISITT

Chapter 3
Brand Positioning and Values

Introduction
This Chapter builds on the notions introduced previously to first consider how to define desired
or ideal brand knowledge structures in terms of how to position a brand. Positioning involves
identifying and establishing points of parity and points of difference to establish the right brand
identity and to create the proper brand image. Next, the chapter reviews how to identify and
establish core brand values and a brand mantra to build brand equity.

3.1 Brand positioning

Brand positioning is at the heart of marketing strategy. Kotler defines brand positioning as the
“act of designing the company’s offer and image so that it occupies a distinct and valued place in
the target customer’s minds.” 7Thus, positioning as the name implies, involves finding the proper
“location” in the minds of a group of consumers or market segment so that they think about a
product or service in the “right” or desired way. Positioning is all about identifying the optimal
location of a brand and its competitors in the minds of consumers to maximize potential benefit
to the firm. A good brand positioning helps to guide marketing strategy by clarifying what a
brand is all about, how it is unique, and how it is similar to competitive brands, and why
consumers should purchase and use the brand.

According to the CBBE model, deciding on a positioning requires determining a frame of

reference (by identifying the target market and the nature of competition) and the ideal points-of-
parity and the points-of-difference brand associations. In other words, it’s necessary to decide
who the target consumer is, who the main competitors are, how the brand is similar to these
competitors, and how the brand is different from these competitors. These four ingredients are
each discussed in turn.

3.1.1 Target Market

7
Phillip Kotler, Marketing Management, 11th ed.(Upper Saddle River, NJ: Prentice-Hall, 2003).
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 Brand Management Process ISITT

Identifying the target segment is important because different consumers may have different
brand knowledge structures and thus different perceptions and preferences for the brand. Without
this understanding, it may be difficult to be able to state which brand associations should be
strongly held, favorable, and unique. A number of considerations are important in defining and
segmenting a market and choosing target market segments. A Few are highlighted here.

Market segmentation involves dividing the market into distinct groups of homogeneous
consumers who have similar needs and consumer behavior and thus require similar marketing
mixes. Defining a market segmentation plan involves tradeoffs between costs and benefits. The
more finely segmented the market, the greater the likelihood that the firm will be able to
implement marketing programs that meet the needs of consumers in any one segment.

Segmentation bases:

Figures 3.1 and 3.2 display some possible segmentation bases for consumer and industrial
markets, respectively. In general, these bases can be classified as descriptive or customer-
oriented (related to what kind of person or organization is the customer) versus behavioral or
product-oriented (related to how the customer thinks of or uses the brand or product).

Thus, behavioral segmentation bases are often most valuable in understanding branding
issues because they have clearer strategic implications. For example, marketers may choose to
segment a particular market on the basis of age and target a certain age group, but the underlying
reason why that age group may be an attractive market segment may be because they are
particularly heavy users of the product or are most likely able to seek the benefit that the product
is best able to deliver.

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 Brand Management Process ISITT

Criteria:
A number of criteria have been offered to guide segmentation and target market decisions, such
as the following: 8
 Identifiability: Can segment identification be easily determined?

 Size: Is there adequate sales potential in the segment?

 Accessibility: Are specialized distribution outlets and communication media available to

reach the segment?

 Responsiveness: How favorably will the segment respond to a tailored marketing

program?

8
Ronald Frank, William Massey, and Yoram Wind, Market Segmentation (Englewood Cliffs, NJ: Prentice-Hall,
1972).
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 Brand Management Process ISITT

Generally speaking, the overriding consideration in defining market segments is

profitability.

3.1.2 Nature of competition

It’s important to define the nature of competition when deciding to target a certain type of
consumer because certain firms have also decided to target that segment in the past (or plan to do
so in the future) or because consumers in that segment already may look to certain brands in their
purchase decisions. Moreover, recognizing the nature of different levels of competition has
important implications for the desired brand associations and for decisions related to which
products and brands are most likely to be seen as close substitutes.

3.1.3 Points of Parity and points of Difference

Points-of-Difference Associations (PODs): PODs are attributes or benefits that consumers
strongly associate with a brand, positively evaluate, and believe that they could not find to the
same extent with a competitive brand. Creating strong, favorable, and unique associations is a
real challenge to marketers, but essential in terms of competitive brand positioning.
Points-of-parity Associations (POPs): POPs are those associations that are not necessarily
unique to the brand but may in fact be shared with other brands. Generally speaking, these
associations are considered as being necessary to be a legitimate and credible offering with a
certain product or service category. Thus, these attribute associations are minimally at the
generic product level and most likely at the expected product level.

3.2 Positioning guidelines

Two key issues in arriving at the optimal competitive brand positioning are:
1. Defining and communicating the competitive frame of reference;
2. Choosing and establishing points of parity and points of difference. 9

3.2.1 Defining and communicating the competitive frame of reference

A starting point in defining a competitive frame of reference for a brand positioning is to

determine category membership. Membership indicates the products or sets of products with
which a brand competes. Choosing to compete in different categories often result in different
competitive frames of reference and thus different POPs and PODs.

Communicating category membership informs the consumer about the goals that might
achieve by using a product or service. For highly established products and services, category
membership is not a focal issue. Target customers are aware that Coca-Cola is a leading brand of
soft drink, that Kellogg’s Corn Flakes is a leading brand of cereal, etc.

9
Brian Sternthal and Alice Tybout, D. Iacobucci, Ed., Kellogg on Marketing, (Chichester, NY: Wiley, 2001).
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 Brand Management Process ISITT

There are many situations, however, in which it’s important to inform consumers of a
brand’s category membership. Perhaps the most obvious situation is the introduction of new
products, where the category membership is not always apparent. This uncertainly can be
especially true for high-tech products.

3.2.2 Choosing and Establishing points of parity and points of

difference
Points of parity are driven by the needs of category membership (to create category POPs) and
the necessity of negating competitors’ PODs (to create competitive POPs). In terms of choosing
points of difference, broadly, the two most important considerations are:

• Consumers should find the POD desirable: Target consumers must find the POD
personally relevant, distinctive, and believable.

• Consumers should believe that the firm has the capabilities to deliver on POD:
Deliverability criteria are: Feasibility, communicability, and sustainability.

If both of these considerations are satisfied, the POD has the potential to become a strong,
favorable, and unique brand association.
Creating a strong, competitive brand positioning requires establishing the right points of parity
and points of difference. The difficulty in doing so, however, is that many of attributes or
benefits that make up the POPs or PODs are negatively correlated. That is, if consumers
mentally rate the brand highly on one particular attribute or benefit, they also rate it poorly on
another important attribute. For example, it might be difficult to position a brand as
“inexpensive” and at the same time assert that is “of the highest quality.” Figure 3.3 displays
some other examples of negatively correlated attributes and benefits.

Figure 3.3: Examples of Negatively Correlated Attributes and Benefits.

Low price vs. high quality

Taste vs. Low calories
Nutritious vs. good tasting
Efficacious vs. mild
Powerful vs. Safe
Strong vs. refined
Ubiquitous vs. Exclusive
Varied vs. Simple
Unfortunately, consumers typically desire to maximize both of the negatively correlated
attributes and benefits. The challenge for marketers is to develop a product or service that
performs well on both dimensions. Thus, several additional ways exist to address the problem of
negatively correlated POPs and PODs. The following three approaches are listed in increasing
level of effectiveness – but also increasing level of difficulty.
• Separate the Attribute: An expensive but sometimes effective approach is to launch two
different marketing campaigns, each devoted to a different brand attribute or benefit. The
hope is that consumers will be less critical when judging the POP and POD benefits in
isolation because the negative correlation might be less apparent.

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 Brand Management Process ISITT

• Leverage Equity of another Entity: brands can potentially link themselves to any kind
of entity that possesses the right kind of equity – a person, other brand, event, and so
forth. As a means to establish an attribute or benefit as a POP or POD.

• Redefine the relationship: brands can provide consumers a different perspective and
suggesting that they may be overlooking or ignoring certain factors or other associations
and considerations.

3.3 Brand Values

It’s often useful to define a set of core brand values to capture the important dimensions of the
brand meaning and what the brand represents. It’s also often useful to synthesize the core brand
values to a core brand promise or brand mantra that reflects the essential “heart and soul” of the
brand.

3.3.1 Core Brand Values

Core brand values are those set of abstract associations (attributes and benefits) that characterize
the 5 to 10 most important aspects or dimensions of a brand. Core brand values can serve as an
important foundation for the brand strategy in numerous ways. In particular, core brand values
can serve as the basis of brand positioning in terms of how they relate to points of parity and
points of difference.

Core brand values can be identified trough a structured process. The first step is to create
a detailed mental map of the brand. A mental map accurately portrays in detail all salient brand
associations and responses for a particular target market (e.g., brand users). Mental map must
reflect the reality of how the brand is actually perceived by consumers in terms of their beliefs,
attitudes, opinions, feelings, images, and experiences. One of the simplest research techniques to
get consumers to create mental map is by asking consumers for their top-of-mind brand
associations (e.g., “when you think of this brand, what comes to mind?”).

Next, brand associations are grouped into categories according to how they are related,
often with two or four associations per category. Each category is labeled to be as descriptive as
possible as a core brand value. For example, in response to a Nike brand probe, consumers may
list Michael Jordan, Tiger Woods, Andre Agassi, and Lance Armstrong, which could be
summarized by the label “top athletes.” In assembling core brand values, the challenge is to
maximize the coverage of the mental map to include all relevant associations while making sure
each core brand value is as distinct as possible.
3.3.2 Brand Mantras
To provide further focus as to what a brand represents, it is often useful to define a brand
mantra. 10 A brand mantra is highly related to branding concepts such as “brand essence” or “core
brand promise” used by others. A brand mantra is an articulation of the “heart and soul” of the
brand. Brand mantras are short, three-to five-word phrases that capture the irrefutable essence or
spirit of the brand positioning and brand values. Their purpose is to ensure that all employees

10
Kevin Lane Keller, ‘’Brand Mantras: Rationale, Criteria, and Examples,’’ Journal of Marketing Management 15
(1999) : 43-51.
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 Brand Management Process ISITT

within the organization and all external marketing partners understand what the brand most
fundamentally is to represent with consumers so that they can adjust their actions accordingly.

Brand mantras are powerful devices, they can provide guidance as to what products to
introduce under the brand, what ad campaigns to run, where and how the brand should be sold,
and so on.

To implement brand mantra, the following considerations should come into play.
 Communicate: a good brand mantra should define the category (or categories) of
business for the brand and set the brand boundaries. It should also clarify what is unique
about the brand.
 Simplify: an effective brand mantra should be memorable. As a result, it should be short,
crisp, and vivid. In many ways, a three-word mantra is ideal because it is the most
economical way to convey the brand positioning;
 Inspire: Ideally, the brand mantra should also stake out ground that is personally
meaningful and relevant to as many employees as possible. Brand mantras can do more
than inform and guide; they can also inspire if the brand values tap into higher-level
meaning with employees as well as consumers.

3.4 Internal Branding

Core brand values and brand mantras point out the importance of internal branding – making
sure that members of the organization are properly aligned with the brand and what it represents.
Much of the branding literature has taken an external perspective, focusing on strategies and
tactics that firms should take to build or manage brand equity with consumers. Without question,
at the heart of all marketing activity is the positioning of a brand and the essence of its meaning
with consumer. In terms of strategic and tactical importance, properly positioning a brand is
essential to creating a strong brand.

Equally important, however, is positioning the brand internally, that is, the manner by
which the brand positioning is explained and communicated internally. 11 Companies need to
engage in continual open dialogue with employees. Branding should be perceived as
participatory. Some firms have pushed B2E (business-to-employee) programs through corporate
intranets and other means. The objective is to inform and to inspire employees to maximize their
mutually beneficial contribution to brand equity.

Conclusion
Determining the desired brand knowledge structures involves positioning a brand in the minds of
consumers. According to the CBBE model, deciding on a positioning requires determining a
frame of reference and the ideal points of points of parity and points of difference brand
associations. A broader set of considerations is also useful for positioning, especially for a more
developed brand that spans multiple categories. A mental map accurately portrays in detail all
salient brand associations and responses for a particular target market. Core brand values are

11
Stan Maklan and Simon Knox, Competing on Value (Upper Saddle River, NJ: Financial Times Prentice-Hall,
2000).
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those set of abstract associations that characterize the 5 to 10 most important aspects or
dimensions of a brand. Core brand values can serve as an important foundation for the brand
strategy in numerous ways. Finally, a brand mantra is an articulation of the “heart and soul” of
the brand. Brand mantras are short, three-to-five word phrases that capture the irrefutable
essence or spirit of the brand positioning and brand values. Their purpose is to ensure that all
employees and external marketing partners understand what the brand most fundamentally is to
represent with consumers so that they can adjust their actions accordingly.

Chapter 4
Brand Marketing Programs

Introduction
29
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This chapter considers how different brand elements can be chosen to build brand equity. After
describing the general criteria for choosing brand elements, it considers specific tactical issues
for each of the different types of brand elements. Further, the chapter considers how marketing
programs in general and product, pricing, and distribution strategies in particular can build
brand equity – that is, enhance brand awareness, improve the brand image, elicit positive brand
responses, and increase brand resonance. Finally, the section considers how marketers can
create integrated marketing communication programs to build brand equity and the leveraging
process.

4.1 Choosing Brand Elements to Build Brand Equity

4.1.1 Criteria for choosing brand elements
In general, there are six criteria in choosing brand elements:
1. Memorability: A necessary condition for building brand equity is achieving a high level
of brand awareness. Toward that goal, brand elements can be chosen that are inherently
memorable and therefore facilitate recall or recognition in purchase or consumption
settings.

2. Meaningfulness: Besides choosing brand elements to build brand awareness, brand

elements can also be chosen whose inherent meaning enhances the formation of brand
associations. Brand elements may take on all kinds of meaning, varying in descriptive, as
well as persuasive, content.

3. Likability: The association suggested by a brand element may not always be related to
the product. Thus, brand elements can be chosen that are in rich in visual and verbal
imagery and inherently fun and interesting.

4. Transferability: The forth general criterion concerns the transferability of the brand
element – in both a product category and geographic sense. First, to what extent can the
brand element add to the brand equity of new products sharing the brand elements
introduced with the product class or across product class? Second, to what extent does the
brand element add to brand equity across geographic boundaries and market segments?

5. Adaptability: The fifth consideration concerns the adaptability of the brand element over
time. Because of changes in consumer values and opinions, or simply because of a need
to remind contemporary, brand elements often must be updated over time. The more
adaptable and flexible the brand element, the easier it is to update it. For example: logos
and characters can be given a new look or a new design to make them appear more
modern and relevant.

6. Protectability: the sixth and final consideration concerns the extent to which brand
element is protectable – both in a legal and competitive sense. In term of legal
considerations, it’s important to (1) choose brand elements that can be legally protected
on an international basis, (2) formally register them with the appropriate legal bodies, and
(3) vigorously defend trademarks from unauthorized competitive infringement. In terms
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 Brand Management Process ISITT

of competitive considerations, Even is a brand element can be protected legally, it still

may be the case that competitive actions can take away much of the brand equity provide
by the brand elements themselves. If a name, package, or other attribute is too easily
copied, much of the uniqueness of the brand may disappear.

4.1.2 Options for Brand Elements

Brand Names: the brand name is a fundamentally important choice because it often captures the
central theme or key associations of a product in a very compact and economical fashion. Brand
names can be an extremely shorthand means of communication. It’s desirable for the brand name
to be simple and easy to pronounce or spell to enhance brand recall. Simplicity reduces
consumers’ cognitive effort to comprehend and process the brand name. Short names often
facilitate recall because they are easy to encode and store in memory. Ease of pronunciation is
critical to obtain valuable word-of-mouth exposure that helps to build strong memory links.
Although choosing a memorable name is valuable, it’s often necessary for the brand to have
broader meaning to consumers than just the product category it is in. Brand names also can be
chosen to communicate abstract considerations. For example, brand names may be intangible or
emotion-laden to arouse certain feelings.

Uniform Resource Locators (URLs): URLs are used to specify locations of pages on the web,
and are also commonly referred to as domain names. Anyone wishing to own a specific URL
must register and pay for the name with a service such as Register.com. Brand recall is critical
for URLs because, at least initially, consumers must remember the URL to be able to get to the
site.

Logos and Symbols: although the brand name typically is the central element of the brand.
Visual brand elements often play a critical role in building brand equity, especially in terms of
brand awareness. Because of their visual nature, logos and symbols are often easily recognized
and can be a valuable way to identify products, although a key concern is how well they become
liked in memory to the corresponding brand name and product to boost brand recall. That is,
consumers may recognize certain symbols but unable to link them to any specific product or
brand.

Characters: characters represent a special symbol – one that takes on human or real life
characteristics. Brand characters typically are introduced through advertising and can play a
central role in these and subsequent ad campaigns and package designs. Brand characters can
provide a number of brand equity benefits. Because they are often colorful and rich in imagery,
they tend to be attention getting. Consequently, brand characters can be quite useful for creating
brand awareness. Brand characters can help brand break through the market place clutter as well
as help to communicate a key product benefits. Perhaps a more common image enhancement is
related to brand personality and just the sheer likability of the brand. The human element of
brand characters can help to create perceptions of the brand as being fun, interesting, and so
forth.

Slogans: slogans are short phrases that communicate descriptive or persuasive information about
the brand. Slogans often appear in advertising but can play an important role on packaging and in
other aspects of the marketing program. Slogans are powerful branding devices because, like
brand names, they are extremely efficient, shorthand means to build brand equity. Slogans can
function as useful “hooks” or “handles” to help consumers grasp the meaning of a brand in terms
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of what the brand is and what makes is special. They are indispensable means of summarizing
and translating the intent of a marketing program in a few short words or phrases.

Jingles: jingles are musical messages written around the brand. Typically composed by
professional songwriters, they often have enough catchy hooks and choruses to become almost
permanently registered in the mind of listeners – sometimes whether they want them to or not!
Jingles can communicate brand benefits, but they often convey product meaning in a nondirect
and fairly abstract fashion given their musical foundation. The potential associations that might
occur for the brand from jingles are probably most likely to relate to feelings and personality and
other such intangibles. Jingles are perhaps most valuable in terms of enhancing brand awareness.
Often, the jingle will repeat the brand name in clever and amusing ways that allow consumers
multiple encoding opportunities. Because of their catchy nature, consumers are also likely to
mentally rehearse or repeat the jingle even after seeing or hearing the ad, providing even
additional encoding opportunities and increasing memorability.

Packaging: packaging involves the activities of designing and producing containers or wrappers
for a product. To achieve the marketing objectives for the brand and satisfy the desires of
consumers, the aesthetic and functional components of packaging must be chosen correctly.
Aesthetic considerations relate to a packaging’s size and shape, material, color, text, and
graphics. Innovations in printing process now permit eye-catching and appealing graphics that
convey elaborate and colorful messages on the package at the “moment of truth” at the point of
purchase. 12 Functionally, structural design is crucial. For example, packaging innovations with
food products over the years have resulted in packages being tamperproof and more convenient
to use.

Packaging can have important brand equity benefits for a company. Often, one of the
strongest associations that consumers have with a brand relates to the look of its packaging. For
example, if you ask the average consumer what come to mind when they think of Heineken beer,
a common response is “green bottle.” The package appearance can become an important means
of brand recognition. Moreover, the information conveyed or inferred from package can build or
reinforce brand associations. Structural packaging innovations can create a point of difference
that permits a higher margin. New packages can also expand a market and capture new market
segments.

4.1.3 Putting It All Together

Each brand element has strengths and weaknesses. Thus, marketers must “mix” brand elements
by choosing different brand elements to achieve different objectives. At the same time, marketers
must “match” brand elements by making sure that certain brand elements are chosen to reinforce
each other by sharing meaning. Figure 2.1 displays strengths and weaknesses of brand elements
options.

Figure 4.1: Critiques of Brand Element Options

12
Raymond Sefarin, ‘’Packaging Becomes an Art,’’ Advertising Age, 12 August 1985, 66.
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 Brand Management Process ISITT

4.2 Designing Marketing Programs to Build Brand

Equity
4.2.1 Personalized Marketing as a new perspective
The rapid expansion of the Internet has brought the need for personalized marketing into sharp
focus. Many maintain that the new economy celebrates the power of the individual consumer.
13
According to one writer,” the worry for big brand owners is that this (individualism) is leading
to a fragmentation of brands as people try to express their individuality by moving away from
the mass market.” 14

To adapt to the increased consumer desire for and competitive forces impelling toward
personalization, marketers are embracing concepts such as experiential marketing, one-to-one
marketing, and permission marketing.

13
Christopher Locke, Rick Levine, Doc Searls, and David Weinberger, The Cluetrain Manifesto: The End of
Business as Usual (Cambridge, MA: Perseus Press, 2000).
14
Richard Tomkins, ‘’Fallen Icons,’’ Financial Times, 1 February 2000.
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Experiential Marketing: It helps to promote a product by not only communicating a product’s

features and benefits but also connecting it with unique and interesting experiences. One
marketing commentator describes experiential marketing by writing, “the idea is not to sell
something, but to demonstrate how a brand can enrich a customer’s life.” 15

One-to-One Marketing: Don Peppers and Martha Rogers have popularized the concept of one-
to-one marketing. 16 The basic rationale of one-to-one marketing is that consumers help to add
value by providing information to marketers; marketers add value, in turn, by taking that
information and generating rewarding experiences for consumers. In doing so, the firm is able to
create switching costs, reduce transaction costs, and maximize utility for consumers, all helping
to build strong, profitable relationships. One-to-one marketing is thus based on several
fundamental concepts:
• Focus on individual consumers through consumer databases – “we single out
consumers.”

• Respond to consumer dialogue via interactivity – “the consumer talks to us.”

• Customize products and services – “we make something unique for him or her.”
Permission Marketing: A pioneer on the topic, Seth Godin, estimates that each American
receives about 3.000 marketing messages daily. 17 He maintains that marketers can no longer
employ “interruption marketing” in terms of mass media campaigns featuring magazines, direct
mail, billboards, radio and television commercials and the like, because consumers have come to
expect – but not necessarily appreciate these – interruptions. By contrast, Godin asserts,
consumers appreciate receiving marketing messages they gave permission for. “The worse the
clutter gets, the more profitable your permission marketing efforts become.”
Generally speaking, One-to-one, permission, and experiential marketing are all potentially
effective means of getting consumers more actively involved with a brand. According to the
CBBE Model, however, the different approaches emphasize different aspects of brand equity.
For example, one-to-one and permission marketing can be seen as particularly effective at
creating stronger behavioral loyalty and attitudinal attachment. Experiential marketing, on the
other hand, would seem to be particularly effective at establishing brand imagery and tapping
into a variety of different feelings as well as helping to build brand communities. Despites
potentially different areas of emphasis, all three approaches can be seen as a means of building
stronger consumer-brand bonds.

4.2.2 Product Strategy

15
Peter Post, ‘’Beyond Brand – The Power of Experience Branding,’’ ANA/The Advertiser, October/November
2OOO.
16
Don Peppers and Martha Rogers, The One to One Feature: Building Relationships One Customer at a Time (New
York: Doubleday, 1997); Don Peppers and Martha Rogers, Enterprise One to One: Tools for Competing in the
Interactive Age (New York: Doubleday, 1999); Don Peppers and Martha Rogers, The One to One Fieldbook: the
Complete Toolkit for Implementing a 1 to 1 Marketing Program (New York: Doubleday, 1999).
17
Seth Godin, Permission Marketing: Turning Strangers into Friends, and Friends into Customers (New York:
Simon & Schuster, 1999).
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The product itself is at the heart of brand equity because it is the primary influence on what
consumers experience with a brand, what they hear about a brand from others, and what the firm
can tell customers about the brand in their communications. In other words, at the heart of a great
brand is invariably a great product. Designing and delivering a product or service that fully
satisfies consumer needs and wants is a prerequisite for successful marketing. Regardless of
whether the product is a tangible good, service, or organization. To create brand loyalty,
consumers’ experiences with the product must at least meet, if not actually surpass, their
expectations. This section considers two topics: how consumers form their opinions of the
quality and value of a product, and the importance of taking a broad perspective through
relationship marketing in formulating product strategy offerings.

Perceived quality: It has been defined as customers’ perception of the overall quality or
superiority of a product or service relative to relevant alternatives and with respect to its intended
purpose. Thus perceived quality is a global assessment based on customer perceptions of what
constitutes a quality product and how well the brand rate on those dimensions. Achieving a
satisfactory level of perceived quality has become more difficult as continual product
improvements over the years have led to heightened consumer expectations regarding the quality
of products. 18

Much research attention has been devoted to understanding how consumers form their
opinions about perceived quality. The specific attributes or benefits that become associated with
favorable evaluations and perceptions of product quality can vary from category to category.
Nevertheless, consistent with the CBBE model, prior research has identified the following
general dimensions of product quality. 19

 Performance: Levels at which the primary characteristics of the product operate (e.g.,
low, medium, high, or very high)
 Features: Secondary elements of a product that complement the primary characteristics
 Conformance quality: Degree to which the product meets specifications and is absent of
defects
 Reliability: Consistency of performance over time and form purchase to purchase
 Durability: Expected Economic life of the product
 Serviceability: Ease of servicing the product
 Style and design: Appearance or feel of quality
Product quality depends not only on functional performance but on broader performance
considerations as well. For example, product quality may also be affected by factors such as
speed, accuracy, and care of product delivery and installation; the promptness, courtesy, and
helpfulness of customer service and training; and the quality of repair service. It depends also on
more abstract imagery such as the symbolism or personality reflected in the brand. These
“augmented” aspects of a product are often crucial to its equity.

18
Stratford Sherman, ‘’How to Prosper in the Value Decade,’’ Fortune, 30 November 1992,91
19
David Garvin, ‘’Product Quality: An Important Strategic Weapon,’’ Business Horizons 27(May – June 1985) : 40
– 43; Philip Kotler, Marketing Management, 10th ed. (Upper Saddle River, NJ: Prentice-Hall, 2000).
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Thus, to build brand equity, marketing model offers suggestions as to how firms can go
beyond mere functional considerations.

Total Quality Management (TQM): it has been embraced by a number of firms to direct their
efforts to maximize the quality of their products. TQM principles have provided some useful
structure and guidance to marketing managers interested in improving product quality.

Return on Quality (ROQ): Adherents of ROQ advocate improving quality only on those
dimensions that produce tangible customer benefits, lower costs, or increased sales. 20 This
bottom-line orientation forces companies to make sure that the quality of the product offerings is
in fact the quality consumers actually want.

Value Chain: From a firm’s perspective, it is therefore necessary to take a broad view of value
creation. Harvard’s Michael Porter has proposed the value chain as a strategic tool for
identifying ways to create more customer value. 21 He views firms as a collection of activities that
are performed to design, produce, market, deliver, and support products. The value chain
identifies five primary value-creating activities (inbound logistics, operations, outbound
logistics, marketing and sales, and service) and four support activities that occur throughout
these primary activities (firm infrastructure, human resources management, technology
development, and procurement). According to Porter, firms can achieve competitive advantages
by improving performance and reducing costs in any or all of these value-creating activities. He
also emphasizes the importance of effectively managing core business processes and cross-
functional integration and cooperation. Porter notes how firms can create competitive advantages
by partnering with other members of the chain value (e.g., suppliers as well as distributors) to
improve the performance of the customer value-delivery system.

Relationship Marketing: Product strategies must therefore transcend the actual product or
service to create stronger bonds with consumers and maximize brand resonance. This broader set
of activities is sometimes called relationship marketing. With relationship marketing, marketers
attempt to transcend the simple purchase exchange process with consumers to make more
meaningful and richer contacts. Relationship marketing attempts to provide a more holistic,
personalized brand experience to create stronger consumer ties. In other words, relationship
marketing attempts to expand both depth and breadth of brand-building marketing programs. The
new approach to marketing reviewed earlier (experiential, permission, and one-to-one
marketing) can all be seen as a means of creating stronger consumer-brand relationships. This
section considers three important relationship marketing issues: mass customization,
aftermarketing, and loyalty programs.

 Mass Customization: the concept behind mass customization, namely, making products
to fit the customer’s exact specifications, is an old one, but the advent of digital-age
technology enables companies to offer customized products on a previously unheard-of-
scale. Via the Internet, Customers ca, communicate their preferences directly to the
manufacturer, who can, by using a sophisticated production line, assemble the product for
a price to that of non-customized item. Mass customization enables consumers to

20
David Creising, ‘’ Quality: How to Make It Pay,’’ Business Week, 8 August 1994, 54-59 ; Roland T. Rust,
Anthony J. Zahorik, and Timothy L. keiningham, ‘’Return On Quality (ROQ): Making Service Quality Financially
Accountable,’’ MSI Report 94-106 (Cambridge, MA: Marketing Science Institute, 1994).
21
Michael E. Porter, Competitive Advantage (New York: Free Press, 1985).
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distinguish themselves with even basic purchases. Customization addresses the need for
individuality.
 Aftermarketing: One notable trend in marketing is the growing importance of
aftermarketing, that is, those marketing activities that occur after customer purchase. For
example, employing video, CD-ROM, or computer diskette to describe both what the
product potentially can do for consumers and how consumers can realize these product
benefits.
 Loyalty programs: loyalty or frequency programs have become one popular means by
which marketers can create stronger ties to customers. 22 The purpose of frequency
marketing has been defined as “identifying, maintaining, and increasing the yield form a
firm’s ‘best’ customers through long-term, interactive, value added relationship.” Firms
in all different kinds of industries – most notably in the airline industry – have established
loyalty programs trough different mixtures of specialized services, newsletters,
premiums, and incentives.

4.2.3 Pricing Strategy

Price is the one revenue-generating element of the traditional marketing mix, and price
premiums are one of the most important brand equity benefits of creating brand awareness and
strong, favorable, and unique associations. Choosing a pricing strategy to build brand equity
involves determining the following:
 A method or approach for how current prices will be set
 A policy or set of guidelines for the depth and duration of promotions and discounts over
time
There are many different approaches to setting prices that depend on a number of
considerations. However, many companies now are employing a value-pricing approach to set
prices and an everyday-low-pricing approach to determine their discount pricing policy over
time.

Value pricing: the objective of value pricing is to uncover the right blend of product quality,
product costs, and product prices that fully satisfies the needs and wants of consumers and the
profit targets of the firm. In general, an effective value-pricing strategy should strike the proper
balance among the following:
 Product design and delivery: Product value can be enhanced through many types of
well conceived and executed marketing programs. Proponents of value pricing point out
that the concept does not mean selling stripped-down versions of products at lower
prices. Consumers are willing to pay premiums when they perceive added value in
products and services.
 Products costs: Another key to a successful value-pricing strategy is to lower costs as
much as possible. Meeting cost targets invariably requires additional cost savings through

22
‘’Loyal, My Brand, to Thee,’’ Promo, 1 October 1997; Arthur Middleton Hughes, ‘’How Safeway Built Loyalty
– Especially among Second-Tier Customers,’’ Target Marketing, 1 March 1999; Laura Bly, “Frequent Fliers Fuel a
Global Currency,” USA Today, 27 April 2001.
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productivity gains, outsourcing, material substitution, product reformulations, process

changes (automation or other factory improvements), and so on. 23
 Products prices: the final key to a successful value-pricing strategy is to understand
exactly how much value consumers perceive in the brand and thus to what extent they
will pay a premium over product costs. A number of techniques are available to estimate
these consumer value perceptions. Perhaps the most straightforward approach involves
directly asking consumers their perceptions of price and value in different ways.
Everyday Low Pricing: Everyday low pricing (EDLP) has received increased attention as a
means of determining the nature of price discounts and promotions over time. EDPL eschews the
saw-tooth, whiplash pattern of alternating price increases and decreases or discounts in favor of
establishing a more consistent set of “everyday” base prices on products. In many cases, these
EDPL prices are based on the value-pricing considerations noted previously.

4.2.4 Channel strategy

The manner by which a product is sold or distributed can have a profound impact on resulting
equity and ultimate sales success of a brand. Marketing channels are defined as “sets of
interdependent organizations involved in the process of making a product or service available for
use or consumption.” 24

Indirect channels: Although indirect channels can consist of a number of different types of
intermediaries, this discussion concentrates on retailers. Retailers tend to have the most visible
and direct contact with customers and therefore have the greatest opportunity to affect brand
equity. Consumers may have associations to any one retailer on the basis of a number of factors,
such as the retailer’s product assortment, pricing and credit policy, and quality of service.
Through the products and brands they stock, the means by which they sell, and so on, retailers
strive to create own brand equity by establishing awareness and strong, favorable, and unique
associations. At the same time, retailers can have a profound influence on the equity of the
brands they sell, especially in terms of the brand-related services that can support or help to
create. Manufacturers must take an active role in helping retailers to care of their brands.
Moreover, retailers have thus increased their power over manufacturers because of the
competition for shelf space. They are now in a better position to set the terms of trade with
manufacturers. Only one way for manufacturers to regain some of their lost power is by creating
strong brands through some of the brand-building tactics. For example, selling innovative and
unique product – properly priced and advertised – that consumers demand. In this way,
consumers may ask or even pressure retailers to stock and promote manufacturers’ products. By
devoting marketing efforts to the end consumer, a manufacturer is said to employ a pull strategy,
since consumers use their buying power and influence on retailers to “pull” the product through
the channel. Alternatively, marketers can devote their selling efforts to the channel members
themselves, providing direct incentives for them to stock and sell products to the end consumer.
This approach is called a push strategy, since the manufacturer is attempting to reach the
consumer by “pushing” the product through each step of the distribution chain.

23
Allan J. Magrath, ‘’Eight Timeless Truths about Pricing,’’ Sales & Marketing Management (October 1989) : 78-
84
24
Kotler Marketing Management, 10th ed.
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 Brand Management Process ISITT

Direct channels: To gain control over the selling process and build stronger relationships with
customers, some manufacturers are introducing their own retail outlets, as well as selling their
product directly to customers through various means. These channels can take many forms. The
most extensive form involves company-owned stores. Company stores are a means to showcase
the brand and all of its different varieties in a manner not easily achieved through normal retail
channels. Firms keep their fingers on the pulse of consumers’ shopping habits. Moreover, some
marketers are attempting to create their own shops within major department stores. These
approaches can offer the desirable dual benefits of appeasing retailers – and perhaps even
benefiting from the retailer’s brand image – while at the same time allowing the firm to retrain
control over the design and implementation of the product presentation at the point of purchase.
Finally another channel option is to sell directly to consumers via phone, mail, or electronic
means.

Web strategies: Recognizing the power of integrated channels, many Internet-based companies
are engaging in “physical world” activities to boost their brand. For example, Yahoo! opened a
promotional store in New York’s Rockefeller Center. Integrated channels allow consumers to
shop when and how they want. For example, one research study suggested that nearly 50 percent
of the most sophisticated shoppers found items they wanted online but purchased them in
stores. 25

4.3 Integrating Marketing Communications to Build

Brand Equity
Marketing communications are the means by which firms attempt to inform, persuade, and
remind consumers – directly or indirectly – about the brands that they sell. In a sense, marketing
communications represent the voice of the brand and are a means by which the brand can
establish a dialogue, build relationship with consumers, and contribute to brand equity.

Thus, the simplest – but most useful way – to judge advertising or any other
communication options is by its ability to achieve the desired brand knowledge structures and
elicit the differential response that makes up brand equity. Figure 4.2 displays a simple three-step
model for judging the effectiveness of any marketing communication option to build brand
equity.

FIGURE 4.2: Simple Test for Marketing Communication Effectiveness

25
Don Peppers and Martha Rogers, ‘’ The ‘Store’ Is Everything,’’ Business 2.0,6 February 2001, 72.
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4.3.1 Overview of Marketing Communication options

Advertising: Advertising can be defined as any paid form of non-personal presentation and
promotion of ideas, goods, or services by an identified sponsor. Advertising plays an important
and often controversial role in contributing to brand equity. Although advertising is recognized
as a powerful means of creating strong, favorable, and unique brand associations and eliciting
positive judgments and feeling, it’s controversial because the specific effects of advertising are
often difficult to quantify and predict. Figure 4.3 summarize the advantages and disadvantages
of the main advertising media.
FIGURE 4.3: Advertising Media Characteristics

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In

designing and evaluating and ad campaign, it’s important to distinguish the message strategy or
positioning of an ad (i.e., what the ad attempts to convey about the brand) from its creative
strategy (i.e., how the ad expresses the brand claims). Designing effective advertising campaigns
is both an art and a science.

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Promotion: Sales promotions can be defined as short-term incentives to encourage trial or

usage of a product or service. 26 Sales promotions can be targeted at either the trade or at end
consumers. Like advertising, sales promotions come in all forms. Whereas advertising typically
provides consumers a reason to buy, sales promotions offer consumers an incentive to buy. Thus,
sales promotions are designed to do the following:
 Change the behavior of the trade so that they carry the brand and actively support it.

 Change the behavior of consumers so that they buy a brand for the first time, buy more of
the brand, or buy the brand earlier or more often

There clearly are advantages to sales promotions. Consumer sales promotions permit
manufacturers to price discriminate by effectively changing different prices to groups of
consumers who vary in their price sensitivity. Besides conveying a sense of urgency to
consumers, carefully designed promotions can build brand equity through information conveyed
or actual product experience that helps to create strong, favorable and unique associations. Sales
promotions can encourage the trade to maintain full stocks and actively support the
manufacturer’s merchandizing efforts.

On the other hand, from a consumer behavior perspective, there are a number of
disadvantages of sales promotions, such as decreased Brand loyalty and increased brand
switching, as well as decreased quality perceptions and increased price sensitivity. Besides
inhibiting the use of franchise-building advertising or other communications, diverting marketing
funds into coupons or other sales promotion sometimes led to some reductions in research and
development budgets and staff. Perhaps most important, the widespread discounting arising from
trade promotions may have led to the increased importance of price as a factor in consumer
decisions, breaking down traditional loyalty patterns.

Consumer Promotions: consumer promotions are designed to change the choices, quantity, or
timing of consumers’ product purchases. Although consumer sales promotions come in all
forms, a distinction has been made between customer franchise building promotions (e.g.,
samples, demonstrations, and educational material) and non-customer franchise building
promotions (e.g., price-off packs, premiums, sweepstakes, and refund offers). 27Customer
franchise building promotions are promotions that are seen as enhancing the attitudes and loyalty
of consumers toward a brand.

Trade Promotions: trade promotions often come in the form of financial incentives or discounts
given to retailers, distributors, and other members of the trade to stock, display, and facilitate in
other ways the sale of a product (e.g., through slotting allowances, point-of-purchase displays,
contests and dealer incentives, training programs, trade shows, and cooperative advertising).
Trade promotions are typically designed to both secure shelf space and distribution for a new
brand or to achieve more prominence on the shelf and in the store. Shelf and Aisle positions in
the store are important because they affect the ability of the brand to catch the eye of the
consumer and increase sales.

Event Marketing and Sponsorship: Event marketing refers to public sponsorship of events or
activities related to sports, art, entertainment, or social causes. Event sponsorship provides a

26
‘’ Banner-Ad Blues,’’ The Economist, 24 February 2001, 63-64.
27
Michael L. Ray, Advertising and Communication Management (Upper Saddle River, NJ : Prentice-Hall, 1982).
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different kind of communication option for marketers. By becoming part f a special and
personally relevant moment in consumer’s lives, sponsors’ involvement with events can broaden
and deepen their relationship with their target market. Marketers report a number of reasons why
they sponsor events:
 To identify with a particular target market or lifestyle

 To increase awareness of the company or product name

 To create or reinforce consumer perceptions of key brand image associations

 To enhance corporate image dimensions

 To create experiences and evokes feelings

 To express commitment to the community

 To entertain key clients or reward key employees

 To permit merchandising or promotional opportunities

Despite these potential advantages, there are a number of potential disadvantages to

sponsorship. The success of an event can be unpredictable and out of the control of the sponsor.
There can be much clutter in sponsorship. Finally, some consumers may resent the
commercialization of events through sponsorship.

Public Relations and Publicity: Public relations and publicity relate to a variety of programs
and are designed to promote or to protect a company’s image or its individual products. Publicity
refers to non-personal communications such as press releases, media interviews, press
conferences, feature articles, newsletters, photographs, films, and tapes. Public relations may
also involve such things as annual reports, fund-raising and membership drives, lobbying, special
event management, and public affairs.

Marketers now recognize that although public relations are invaluable during a marketing
crisis, it also needs to be a routine part of any marketing communications program.
Personal selling: personal selling involves face-to-face interaction with one or more prospective
purchases for the purpose of making sales. Personal selling represents a communication option
with pros and cons almost exactly the opposite of advertising.

4.3.2 Developing Integrated Marketing Communication Programs

Marketers should “mix and match” communication options to build brand equity – that is,
choose a variety of different communication options that share common but also offer different,
complementary advantages.

Mixing Communication Options: From the perspective of customer-based brand equity,

marketers should evaluate all possible communication options available to create knowledge
structures according to effectiveness criteria as well as cost considerations. This broad view of
brand-building activities is especially relevant when considering marketing communication
strategies to improve brand awareness.

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In making the final decision as to show much and what kinds of marketing communications are
necessary, economic theory would suggest placing dollars into a marketing communication
budget and across communication options according to marginal revenue and cost.

Matching Communication Options: there are many ways to create IMC programs. A number of
considerations come into play when holistically evaluating an IMC program, that is, when
considering responses to a set of communications across a group of consumers. this discussion
assumes that the marketer has already thoroughly researched the target market and fully
understands who they are – their perception, attitudes, and behaviors – and therefore knows
exactly what needs to be done with them in terms of communication objectives.

In assessing the collective impact of an IMC program, the overriding goal is to create the most
effective and efficient communication program possible. Toward that goal, six relevant criteria
can be identified:

1. Coverage: Coverage relates to the proportion of the audience that is reached by each
communication option employed, as well as how much overlap exists among
communication options.

2. Contribution: Contribution relates to the inherent ability of a marketing communication

to create the desired response and communication option.

3. Commonality: Commonality relates to the extent to which common associations are

reinforced across communication options, that is, is the extent to which information
conveyed by different communication options shares meaning.

4. Complementarily: It relates to the extent to which different associations and linkages are
emphasized across communication options.

5. Versality: It refers to the extent that a marketing communication option is robust and
effective for different groups of consumers.

6. Cost: evaluations of marketing communications on all of the preceding criteria must be

weight against their cost to arrive at the most effective and efficient communication
program.

4.4 Leveraging Secondary Brand Knowledge to Build

Brand Equity
Linking the brand to some other entity – some source factor or related person, place, or thing –
may create a new set of associations from the brand to the entity as well as affect exciting brand
associations. Both effects are discussed next.

4.4.1 Creation of New Brand Associations

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 Brand Management Process ISITT

By making a connection between the brand and another entity, consumers may form a mental
association from the brand to this other entity and, consequently, to any or all associations,
judgments, feelings, and the like linked to that entity. In general, this secondary brand
knowledge is most likely to affect evaluations of a new product when consumers lack either the
motivation or ability to judge product related concerns. In other words, when consumers either
don’t care much about choosing a particular brand or don’t feel that they possess the knowledge
to choose the appropriate brand, they may be more likely to make brand decisions on the basis of
such secondary considerations as what they think, feel, or know about the country from which
the product came, the store in which the product is sold, and so forth.

4.4.2 Effects on Existing Brand Knowledge

Linking the brand to some other entity may not only create new brand associations to the entity
but may also affect existing brand associations. The basic mechanism involved with these
indirect effects of leveraging secondary brand knowledge is as follows. Consumers have some
knowledge of an entity (e.g., varying degrees of awareness, thoughts, feelings, images, beliefs,
perceptions, opinions). When a brand is identified as being linked to that entity, consumers may
infer that some of the particular associations, judgments, or feelings that characterize the entity
may also characterize the brand.

4.4.3 Co-Branding Case

Co-branding – also called brand bundling or brand alliances – occurs when two or more existing
brands are combined into a joint product or are marketed together in some fashion. Figure 4.4
Summarize the main advantages and disadvantages of co-branding.

Figure 4.4: Advantages and Disadvantages of Co-branding

To create a strong brand, it’s important that both brands entering the agreement have
adequate brand awareness; sufficiently strong, favorable, and unique associations; and positive
consumer judgments and feelings. Thus, a necessary but not sufficient condition for co-branding
success is that the two brands separately have some brand equity. The most important
requirement is that there is a logical fit between two brands such that the combined brand or
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marketing activity maximizes the advantages of the individual brands while minimizing the
disadvantages.

More generally, brand alliances, such as with co-branding, involve a number of decision
factors, such as the following.
 What capabilities do you not have?

 What resource constraints are you faced with (people, time, money, etc.)?

 What growth goals of revenue needs do you have?

In assessing a joint branding opportunity, the following questions should be considered:

 Is it a profitable business venture?

 How does it help to maintain or strengthen brand equity?

 Is there any possible risk of dilution of brand equity?

 Does it offer any extrinsic advantages (e.g., learning opportunities)?

One of the highest-profile brand alliances is that of Disney and McDonald’s which has the
exclusive global rights for 10 years in the fast food industry to promote everything from Disney
movies and videos to TV shows and theme parks. McDonald’s has brand partnership with a
number of brands, including Fisher-Price toys for its Happy Meals.

Conclusion
To conclude, the three major ways to build customer-based brand equity are: (1) To mix and
match brand elements, (2) to develop marketing strategies that include product, pricing, channel,
and communication policies, (3) Linking the brand to some other entity to enhance the
competitive advantage. In the next part, we will discuss about measurement procedures to assess
how well brands are doing.

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Chapter 5
Measuring brands

Introduction
The ideal brand equity measurement system would provide complete, up-to-date, and
relevant information on the brand and all its competitors to relevant decision makers within the
organization. Introducing a brand equity measurement system requires two critical steps:
designing a brand value chain and establishing a brand tracking studies system. This chapter
examines these two steps in detail.

5.1 The brand value chain

The brand value chain is a structured approach to assessing the sources and outcomes of
brand equity and the manner by which marketing activities create brand value. The brand value
chain recognizes that numerous individuals within an organization can potentially affect brand
equity and must be cognizant of relevant branding effects. Different individuals, however, make
different brand-related decisions and need different types of information. Accordingly, the brand
value chain provides insights to support brand managers, chief marketing officers, and managing
directors and chief executive officers.

The brand value chain has several basic premises. Fundamentally, it assumes that the value
of a brand ultimately resides with customers. Based on this insight, the model next assumes that
the brand value creation process begins when the firm invests in a marketing program targeting
actual or potential customers. The marketing activity associated with the program then affects
the customer mindset with respect to the brand – what customers know and feel about the brand.
This mindset, across a broad group of customers, then results in certain outcomes for the brand
in terms of how it performs in the marketplace – the collective impact of individual customer
actions regarding how much and when they purchase, the price that they pay, and so forth.

Finally, the investment community considers this market performance and other factors such
as replacement cost and purchase price in acquisitions to arrive at an assessment of shareholder
value in general and a value of the brand in particular.

The model also assumes that a number of linking factors intervene between these stages.
These linking factors determine the extent to which value created at one stage transfers or
“multiplies” to the next stage. Three sets of multipliers moderate the transfer between the
marketing program and the subsequent three value stages: the program multiplier, the customer
multiplier, and the market multiplier. The brand value chain model is summarized in the
following figure.

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28
Figure 5.1: The Brand Value Chain

VALUE
Marketing Customer Market Shareholder
STAGES
Program Mindset Performance Value
Investment

- Products - Awareness - Price premiums - Stock price

- Communications - Associations - Price elasticities - P/E ratio
- Trade - Attitudes - Market share - Market capitalization
- Employee - Attachment - Expansion success
- Other - Activity - Cost structure
- Profitability

MULTIPLIER Program Marketplace Investor

Quality Conditions Sentiment

- Clarity - Competitive reactions - Market dynamics

- Relevance - Channel support - Growth potential
- Distinctiveness - Customer size and profile - Risk profile
- Consistency - Brand contribution

Brand value creation begins with marketing activity by the firm that influences customers
in a way affecting how the brand performs in the marketplace and thus how it is valued by the
financial community.

5.1.1 Marketing Program Investment

Any marketing program investment that potentially can be attributed to brand value
development, either intentional or not, falls into this first value stage. Specially, some of the
bigger marketing expenditures relate to product research, development, and design; trade or
intermediary support; and marketing communications (e.g., advertising, promotion, sponsorship,
direct and interactive marketing, personal selling, publicity, and public relations). The extent of
financial investment committed to the marketing program, however, does not guarantee success
in terms of brand value creation. The ability of a marketing program investment to transfer of
multiply farther down the chain will thus depend on quantitative aspects of the marketing
program multiplier.

 Program Multiplier

The ability of the marketing program to affect the customer mindset will depend on the
quality of that program investment. There are a number of different means to judge the

28
Kevin Lane Keller and Don Lehmann, “The Brand Value Chain: Optimizing Strategic and Financial Brand
Performance,” working paper. Dartmouth College, 2002.
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quality of a marketing program. Four particularly important factors are as follows:

 Clarity: how much clarity is evident in the marketing program? Do consumers

properly interpret and evaluate the meaning conveyed by brand marketing?

 Relevance: how relevant is the marketing program to customers? Do consumers

feel that the brand is one that should receive serious consideration?

 Distinctiveness: how unique or distinctive the program from those offered by

competitors? How creative or differentiating the marketing program?

 Consistency: how consistent and well integrated is the marketing program? Do all
aspects of the marketing program combine to create the biggest impact with
customers? Does the marketing program relate effectively to past marketing
programs and properly balance continuity and change, evolving the brand in the
right direction?

Not surprisingly, a well-integrated marketing program that has been carefully designed
and implemented to be highly relevant and unique to customers is likely to achieve a greater
return on investment from marketing program expenditures.

5.1.2 Customer Mindset

The issue is, in what ways have customers been changed as a result of the marketing
program? How have those changes manifested themselves in the customer mindset? The
customer mindset includes everything that exists in the minds of the customers with respect to a
brand: thoughts, feelings, experiences, images, perceptions, beliefs, attitudes and so forth.
A host of different approaches and measures are available to assess value at this stage.
Nevertheless, five dimensions have emerged from prior research and are also highlighted in the
CBBE model as particularly important measures of the customer mindset:

 Brand awareness: the extent and ease with customers recall and recognize the brand and
can identify the products and services with which it is associated.

 Brand associations: the strength, favorability, and uniqueness of perceived attributes and
benefits for the brand. Brand associations often represent key sources of brand value,
because they are the means by which consumers feel brands satisfy their needs.

 Brand attitudes: overall evaluations of the brand in terms of its quality and satisfaction it
generates.

 Brand attachment: how loyal the customer feels toward the brand. A strong form of
attachment, adherence, refers to the consumer’s residence to change and the ability of a
brand to withstand bad news (e.g., product or service failure). In the extreme, attachment
can even become addiction.

 Brand activity: the extent to which customers use the brand, talk to others about the
brand, seek out brand information, promotions, and events, and so on.
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An obvious hierarchy exists in the dimensions of value: awareness supports associations,

which drive attitudes that lead to attachment and creativity. Brand value is created at this stage
when customers have a high level of awareness; strong, favorable, and unique brand
associations; positive brand attitudes; intense brand attachment and loyalty; and a high degree of
brand activity. Creating the right customer mindset can be critical in terms of building brand
equity and value. Moreover, success with consumers or customers may not translate success in
the marketplace unless other conditions also prevail. The ability of this customer mindset to
create value at the next stage depends on external factors designated the customer multiplier, as
follows.

 Customer multiplier
The extent to which value created in the minds of customers affects market performance
depends on various contextual factors external to the customer. Three such factors are as
follows:

 Competitive superiority: how effective are the quantity and quality of the
marketing investment of other competing brands.

 Channel and other intermediary support: how much brand reinforcement and
selling effort is being put forth by various marketing partners

 Customer size and profile: how many and what types of costumers (e.g., profitable
or not) are attached to the brand.

The value created in the minds of customers will translate to favorable market
performance when competitors fail to provide a significant threat, when channel members and
other intermediaries provide strong supports, and when a sizable number of profitable customers
are attached to the brand.

5.1.3 Market performance

As it was explained, the customer mindset affects how customers react or respond in the
marketplace in a variety of ways. Six key outcomes of that response are as follows. The first two
dimensions relate to price premiums and price elasticities. How much extra are customers
willing to pay for a comparable product because of its brand? And how much does their demand
increase or decrease when the price rises or falls? A third dimension is market share, which
measures the success of marketing program to drive brand sales. Taken together, the first three
dimensions determine the direct revenue stream attributable to the brand over time. Brand value
is created with higher market shares, greater price premiums, and more elastic responses to price
decreases and inelastic responses to price increases.

The fourth dimension is brand expansion, the success of the brand is supporting line and
category extensions and new product launches into related categories. Thus, this dimension
captures the ability to add enhancements to the revenue stream. The fifth dimension is cost
structure or, more specifically, savings in terms of the ability to reduce marketing program
expenditures because of the prevailing customer mindset. In other words, because customers
already have favorable opinions and knowledge about a brand, any aspect of the marketing
program is likely to be more effective for the same expenditure level; alternatively, the same
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level of effectiveness can be achieved at a lower cost because ads are more memorable, sales
calls more productive, and so on. When combined, these five factors lead to brand profitability,
the sixth dimension.

In short, brand value is created at this stage by building profitable sales volumes through
a combination of these dimensions. The ability of the brand value created at this stage to reach
the final stage in terms of stock market valuation again depends on external factors, this time
according to the market multiplier.

 Market Multiplier

The extent to which the value engendered by the market performance of a brand is
manifested in shareholder value depends on various contextual factors external to the
brand itself. Financial analysts and investors consider a host of factors in arriving at their
brand valuations and investment decisions. Among these considerations are the
following:

 Market dynamics: what are the dynamics of the financial markets as a whole (e.g.,
interest rates, investor sentiment, or supply of capital)?

 Growth potential: what are the growth potentials or prospects of the brand and the
industry in which it operates? For example, how helpful are the facilitating factors
and how inhibiting are the hindering external factors that make up the firm’s
economic, social, physical, and legal environment?

 Risk profile: what is the risk profile for the brand? How vulnerable is the brand
likely to be to those facilitating and inhibiting factors?

 Brand contribution: how important is the brand as part of the firm’s brand
portfolio and all the brands it has?

The value created in the marketplace for the brand is most likely to be fully reflected in
shareholder value when the firm is operating in a healthy industry without serious environmental
hindrances or barriers and when the brand contributes a significant portion of the firm’s revenues
and appears to have bright prospects.

5.1.4 Shareholder Value

Based on all available current and forecasted information about a brand as well as many
other considerations, the financial marketplace then formulates opinions and makes various
assessments that have very direct financial implications for the brand value. Three important
indicators are the stock price, the price/earnings multiple, and overall market capitalization for
the firm.

5.2 Brand Tracking Studies

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The brand value chain provides a big picture perspective as to how brand equity or value
can be created. Combined with the CBBE model, it provides guidance as to how to position a
brand and how well the marketing has achieved that positioning. The concept of brand audits is a
means to provide in-depth information and insights that are essential for setting long-term
strategic direction for the brand. Brand audits thus are an invaluable guide in positioning a brand.
In terms of more short-term tactical considerations, less-detailed brand-related information
should be collected as a result of conducting ongoing tracking studies. Tracking studies involve
information collected from consumers on a routine basis over time. Such studies typically
employ quantitative measures to provide marketers with current information as to how their
brands and marketing programs are performing on a number of key dimensions identified by the
brand audit or other means. Trucking studies are a means of applying the brand value chain to
understand where, how much, and in what ways brand value is being created, thus offering
invaluable information about how well a positioning has been achieved.

Tracking studies play an important function for managers by providing consistent

baseline information to facilitate their day-to-day decision making. As more marketing activity
surrounds the brand (e.g., products are introduced as brand extensions, an increasing variety of
communication options are incorporated into marketing communications programs supporting
the brand, etc.), it becomes difficult and expensive to reach each action. Tracking studies provide
valuable diagnostic insights into the collective effects of a host of marketing activities on the
customer mindset, market outcomes, and perhaps even shareholder value. Regardless of how
many changes are made in the marketing program over time, it is important to monitor the health
of the brand and its equity so that proper adjustments can be made if necessary.

A number of issues must be addressed in implementing a brand equity tracking system. In

the following points we will address what measures should be employed in tracking studies, how
tracking studies should be implemented, and how tracking studies should be interpreted.

5.2.1 What to track

This section provides some general guidelines for tracking and considers several
additional types of measures that may be usefully employed in tracking. In that spirit, it should
be recognized that it is usually necessary to customize tracking surveys to address the specific
issues faced by the brand or brands in question. To a great extent, each brand faces a unique
situation that must be reflected in different types of questions in its tracking survey.

 Product-Brand Tracking

Tracking an individual branded product involves measuring brand awareness and image
for the particular brand. In terms of brand awareness, both recall and recognition measures
should be collected. In general, awareness measures should move from more general to more
specific questions. Thus, it may make sense to first ask consumers what brands come to mind in
certain situations, to next ask for recall of brands on the basis of various product category cues,
and to then finish with tests of brand recognition (if necessary).

As with brand awareness, it is usually desirable that a range of more general to more
specific measures be employed in brand tracking surveys to measure brand image, especially in
terms of specific perceptions (i.e., what consumers think characterizes the brand) and evaluations
(i.e., what the brands mean to consumers). A number of specific brand associations typically
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exist for the brand, depending on the richness of consumer knowledge structures, which could
potentially be tracked over time.

The most important specific brand associations are those performance and imagery
beliefs that serve as the basis of brand positioning in terms of key points of parity and points of
difference with competitive brands, for example, attitudes and benefits such as convenience and
ease of use. Certainly those specific brand associations that make up the potential sources of
brand equity should be assessed on the basis of strength, favorability, and uniqueness in that
order. Unless associations are strong enough that they are likely to be recalled, their favorability
does not matter, and unless associations are sufficiently favorable to be considerations in
marketing a decision, uniqueness does not matter. Ideally, measures of all three dimensions
would be collected, but perhaps for only certain associations and only some of the time.

Given that brands often compete at the augmented level, it is important to measure all
associations that may distinguish competing brands. Thus, measures of specific, “lower-level”
brand associations should include all potential sources of brand equity (performance and imagery
attributes and benefits). Because they often present key points of parity or points of difference, it
is particularly important to track benefit associations. To better understand any changes in
benefit beliefs for a brand, however, it may be necessary to also measure the corresponding
attribute beliefs that underlie those benefits. In other words, changes in descriptive attribute
beliefs may help to explain changes in more evaluative benefit beliefs for a brand.

In the same time it’s also important to track more general, “higher-level” judgments,
feelings, and other outcome-related measures. After asking for their overall opinions, consumers
can be asked if they have changed their attitudes, intensions, or behavior in recent weeks or
months and, if so, why they did so.

 Corporate or Family Brand Tracking

In the case of a family or corporate brand, some additional questions may be warranted.
Although many of these types of questions could be included in tracking studies for individual
products for the brand, there may also be justification for tracking the corporate or family brand
separately or concurrently (or both) with individual products. Besides the measures of corporate
credibility identified before, other specific measures of corporate brand associations are possible,
including some of the following:

- How well managed is the company?

- How easy is it to do business with the company?
- How concerned is the company with its customers?
- How approachable is the company?
- How accessible is the company?
- How much do you like doing business with the company?

The actual questions used should reflect the level and nature of experience that the
particular group of respondents would be likely to have had with the company. When a brand is
identified with multiple products, as with a corporate or family branding strategy, one important
issue is which particular products the brand reminds consumers of. An important related
consideration is which particular products are most influential in affecting consumer perceptions
about the brand. To identify which products are most closely linked to the brand, consumers
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could be probed as to which products they associate with the brand on an unaided basis or an
aided basis by listing sub-brand names. To better understand the dynamics between the brand
and its corresponding products, consumers can be probed as to their relationship.

 Global Tracking

If tracking involves diverse geographic markets – especially if both developing and

developed countries are involved – then it may be necessary to have a broader set of background
measures to put the brand development in those markets in the right perspective. These brand
context measures would presumably not need to be collected frequently, but could provide useful
explanatory information.

Figure 5.2: Brand Context Measures 29

Economic Indicators Media Indicators
Gross domestic product Media consumption: total time spent
Interest rates watching TV, consuming other media
Unemployment Advertising expenditure: total, by media and
Average wage product category
Disposable income
Home ownership and housing debt Demographic Profile
Exchange rates, share markets, and balance of Population profile: age, sex, income,
payment household size
Geographic distribution
Retail Ethnic and cultural profile
Total spent in supermarkets
Change year to year Other products and services
Growth in house brand Transport: own car – how many
Best description of car
Technology Motorbike
Computer at home Home ownership or renting
Modem Domestic trips overnight in last year
Access to and use of Internet International trips in last two years
Phones
Mobile phones Attitude to Brands and Shopping
Microwaves Buy on price
Freezers Like to buy new things
Television Country of origin or manufacture
Prefer to buy things that have been advertised
Personal Attitudes and Values Importance or familiar brands
Confidence
Security
Family
Environment
Traditional values
Foreigners vs. sovereignty

29
John B. Frey, “Measuring Corporate Reputation and niversity, March 17, 1989).
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 Brand Management Process ISITT

5.2.2 How to Conduct Tracking Studies

One question with these tracking studies is, which elements of the brand should be used?
In general, the brand name is always used in tracking, but it may also make sense to employ
other brand elements, such as a logo or symbol, in probing brand structures, especially if these
elements can play a visible and important role in the decision process. Conducting tracking
studies also requires decisions in terms of who to track, as well as when and where to track.

 Who to Track

Tracking often concentrates on current customers, but it can also be informative to

monitor nonusers of the brand or even of the product category as a whole (e.g., to suggest
potential segmentation strategies). It often can be insightful to track those customers loyal to the
brand versus those who are loyal to other brands or who switch among brands. Among current
customers of the brand, it is often informative to distinguish between heavy and light users of the
brand. Dividing up the market typically requires different questionnaires (or at least sections of a
questionnaire) to better capture the specific issues with each segment.

 When and where to track

It is necessary to decide how frequently tracking information should be collected. One

useful tracking approach for monitoring brand associations involves continuous tracking studies,
in which information is collected from consumers on a continual basis over time. The advantage
of continuous tracking is that it smoothes out aberrations or unusual marketing activities or
events (e.g., a splashy new ad campaign or an unlikely occurrence in the marketing environment)
to provide a more representative set of baseline measures.

There is a host of different ways to conduct these types of studies. The frequency of such
tracking studies, in general, depends on the frequency of product purchase (durable goods are
typically tracked less frequently because they are purchased less often) and on the consumer
behavior and marketing activity in the product category. Many companies conduct a certain
number of interviews of different consumers every week – or even every day – and assemble the
results on a rolling or moving average basis for monthly or quarterly reports.

When the brand has more stable and enduring associations, tracking can be conducted on
a less frequent basis. Nevertheless, even if it were the case that marketing of a brand may not
appreciably change over time, it is still important to track brands because competitive entries can
change consumer perceptions of the dynamics within the market.

Finally, on a global basis, it is important to recognize the stage of the product or brand
life cycle in deciding on the frequency of tracking: opinions of consumers in mature markets
may not change much, whereas emerging markets may shift quickly and perhaps in
unpredictable ways.

5.2.3 How to Interpret Tracking Studies

For tracking measures to yield actionable insights and recommendations, they must be as
reliable and sensitive as possible. One problem with many traditional measures of marketing
phenomena is that they do not change much over time. Although this stability may reflect the
fact that the underlying levels of brand awareness; the strength, favorability, and uniqueness of

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brand associations; the valence of brand judgments and feelings; and the intensity and activity of
brand loyalty do not change much, in other cases it may be that one or more of those dimensions
may have changed to some extent but that measures themselves are not sensitive enough to
detect these more subtle shifts. To develop sensitive tracking measures, it may be necessary to
phrase questions in a comparative (e.g., “compared to other brands, how much…”) or temporal
(e.g., “compared to one month or one year ago, how much…”) manner.

Another challenge in interpreting tracking studies is to decide on appropriate cutoffs. For

example, what is a sufficiently high level of brand awareness? When are brand associations
sufficiently strong, favorable, and unique? How positive should brand judgments and feelings
be? What are reasonable expectations for the amount of brand resonance? To some extent, these
targets need to be driven by competitive considerations and the nature of the category. In some
low-involvement categories, it may be difficult to carve out a distinct image, unlike higher
involvement products (e.g., cars or computers). Along these lines, it may be important to allow
for and monitor the number of respondents who indicate that they don’t know or have no
response with respect to the brand tracking measures: the more of these types of answers that are
evident, the less consumers would seem to care.

One of the most important tasks in conducting brand tracking studies is to identify the
determinants of brand equity. Of the brand associations that potentially can serve as sources of
brand equity, which ones actually influence consumer attitudes and behavior and create value for
the brand? Marketers must identify the real value drivers for a brand – that is, those tangible and
intangible points of difference that influence and determine consumers’ product and brand
choices. Similarly, the marketing activities that have the most effective impact on brand
knowledge need to be identified, especially with respect to consumer exposure to advertising and
other communication mix elements. Carefully monitoring and relating key sources and outcome
measures of brand equity should help to address these issues.

Conclusion
This chapter outlined a set of research procedures designed to provide timely, accurate, and
actionable information for marketers regarding brands so that they can make the best possible
tactical decisions in the short run as well as strategic decisions in the long run.

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Chapter 6
Implementing branding strategies

Introduction
This chapter begins by describing two important strategic tools. The brand-
product matrix and the brand hierarchy help to characterize and formulate branding
strategies by defining various relationships among brands and products. Next, it
suggests some guidelines as how to best design branding strategies. Finally, it considers
a number of different issues in implementing branding strategies, including designing
the brand hierarchy and the supporting marketing program.

6.1 The Brand-Product Matrix

To characterize the product and branding strategy of a firm, one useful tool is the
brand-product matrix, a graphical representation of all the brands and products sold by the
firm. The matrix has the brands of a firm as rows and the corresponding products as columns.

The rows of the matrix represent brand-product relationships and capture the brand
extension strategy of the firm in terms of the number and nature of products sold under the
firm’s brands. A brand line consists of all products – original as well as line and category
extensions – sold under a particular brand. Thus, a brand line would be one row of the matrix.
As we will see next, a potential new product extension for a brand must be judged by how
effectively it leverages existing brand equity from the parent brand to the new product, as well
as how effectively the extension, in turn, contributes to the equity of the parent brand.

Products

1 2 … N
A
Brands B
…
M

Figure 6.1: Brand-Product matrix 30

30
Philip Kotler, Marketing Management, 11th ed.

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The columns of the matrix, on the other hand, represent product-brand relationships
and capture the brand portfolio strategy in terms of number and nature of brands to be
marketed in each category. The brand portfolio is the set of all brands and brands line that a
particular firm offers for ale to buyers in a particular category, thus, a brand portfolio would
be one particular column of the matrix. Different brands may be designed and marketed to
appeal to different market segments. A brand portfolio must be judged on its ability to
collectively maximize brand equity: any one brand in the portfolio should not harm or
decrease the equity of other brands in the portfolio. In other words, the optimal brand
portfolio is one in which each brand maximizes equity in combination with all other brands in
the portfolio.

One final set of definitions is useful. A product line is a group of products within a
product category that closely related because they function in a similar manner, are sold to the
same customer groups, are marketed through the same type of outlets, or fall within given
price ranges. A product line may be composed of different brands or a single family brand or
individual brand that has been line extended. A product mix (or product assortment) is the set
of all product lines and items that a particular seller makes available to buyers. Thus product
lines represent different sets of columns in the brand-product matrix that, in total, make up the
product mix. A brand mix (or brand assortment) is the set of all brand lines that a particular
seller makes available to buyers.

The branding strategy for a firm reflects the number and nature of common and
distinctive brand elements applied to the different products sold by the firm. In other words,
branding strategy involves deciding which brand names, logos, symbols, and so forth should
be applied to which products and the nature of new and existing brand elements to be applied
to new products. A branding strategy for a firm can be characterized according to its breadth
(i.e., in terms of brand-product relationships and brand extension strategy) and its depth (i.e.,
in terms of product-brand relationships and the brand portfolio or mix). For example, a
branding can be seen on both deep and broad if the firm has a large number of brands, many
of which have been extended into various product categories.

6.1.1 Breadth of a Branding Strategy

The breadth of a branding strategy concerns the number and nature of different
products linked to the brands sold by a firm. A number of considerations arise concerning the
product mix and which products the firm should manufacture or sell. Strategic decisions have
to be made concerning how many different product lines the company should carry (i.e., the
breadth of the product mix), as well as how many variants should be offered in each product
line (i.e., the depth of the product mix).

 Breadth of Product Mix

Lehmann and Winer provide an in-depth consideration of factors affecting product

category attractiveness. 31 They note that three main sets of factors determine the inherent
attractiveness of a product category, as follows:

31
Donald R. Lehmann and Russell S. Winer, „Category Attractiveness Analysis“ (Chapter 4) in Product
Management (Burr Ridge, IL: Irwin, 1994).

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 Brand Management Process ISITT

Figure 6.2: Category Attractiveness Criteria

Aggregate Market Factors

Market size
Market growth
Stage in product life cycle
Sales cyclicity
Seasonality
Profits

Category Factors
Threats of new entrants
Bargaining power of buyers
Bargaining power of suppliers
Current category rivalry
Pressures from substitutes
Category capacity

Environmental Factors
Technological
Political
Economic
Regulatory
Social

All of these factors relate in some way to consumers, completion, and the marketing
environment and must be assessed to determine the inherent attractiveness of a product
category or market. The ultimate decision for a firm to enter such markets, however, must
also take into account fundamental considerations related to the firm’s capabilities and
abilities as well as its strategic objectives and goals.

 Depth of Product Mix

Once broad decision concerning appropriate product categories and markets in which to
compete have been made, decisions concerning the optimal product line strategy must also be
made. Product line analysis requires a clear understanding of the market and the cost
interdependencies between products. Specifically, product line analysis involves examining
the percentage of sales and profits contributed by each item or member in the product line.
The ability of each item in the product line to withstand competition and address consumer
needs also must be assessed.

At its simplest, a product line is too short if the manager can increase long-term profits by
adding items; the line is too long if the manager can increase profits by dropping items.
Increasing the length of the product line by adding new variants or items typically expands
market coverage and therefore market share but also increases costs. From a branding
perspective, longer product lines may decrease the consistency of the associated brand image
if the same brand is used.

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 Brand Management Process ISITT

Given that the product policy has been set for a firm in terms of appropriate product
categories and product lines, then the proper branding strategy must be decided upon in terms
of which brand elements should be used for which products. Specifically, decisions must be
made as to which products to attach to any one brand as well as how many brands to support
in any one products category.

6.1.2 Depth of a branding strategy

The depth of a branding strategy concerns the number and nature of different brands
marketed in the product class sold by a firm. But why might a firm have multiple brands in
the same product category? The first reason relates to market coverage.

The main reason to adopt multiple brands is to pursue multiple market segments. These
different market segments may be based on all types of considerations – different price
segments, different channels of distribution, different geographic boundaries, and so forth.

In many cases, multiple brands have to be introduced by a firm because any one brand is
not viewed equally favorably by all the different market segments that the firm would like to
target.

Some other reasons for introducing multiple brands in a category include the following:
 To increase shelf presence and retailer dependence in the store
 To attract consumers seeking variety who may otherwise switch to another brand
 To increase internal competition within the firm
 To yield economies of scale in advertising, sales, merchandising, and physical
distribution

In designing the optimal brand portfolio, marketers generally need to trade off market
coverage and these other considerations with costs and profitability. In other words, any brand
should be clearly differentiated and appealing to a sizable enough marketing segment to
justify its marketing and production costs.

In general, the basic principle in designing a brand portfolio is to maximize market

coverage so that no potential customers are being ignored, but to minimize brand overlap so
that brands are not competing among themselves to gain the same customer’s approval. Each
brand should have a distinct target market and positioning.

Besides these considerations, there are a number of specific roles that brands can play as
part of a brand portfolio. The following figure summarizes some of the different functions and
roles that brands might take.

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 Brand Management Process ISITT

Figure 6.3: Possible Special Roles of Brands in the Brand Portfolio 32

1. To attract a particular market segment not currently being covered by other brands of
the firm.
2. To serve as a flanker and protect flagship brands.
3. To serve as a cash cow and be milked for profits.
4. To serve as a low-end entry-level product to attract new customers to the brand
franchise.
5. To serve as a high-end prestige product to add prestige and credibility to entire brand
portfolio.
6. To increase shelf presence and retailer dependence in the store.
7. To attract consumers seeking variety who may otherwise have switched to another
brand.
8. To increase internal competition within the firm.
9. To yield economies of scale in advertising, sales, merchandising, and physical
distribution.

 Flankers

An increasingly important role for certain brands is as protective flanker or “fighter”

brands. The purpose of flanker brands typically is to create stronger points of parity with
competitors’ brands so that more important and more profitable flagship brands can retain
their desired positioning. In particular, many firms are introducing discount brands as flanker
brands to better compete with store brands and private labels and protect their higher-priced
brand companions.

In designing these fighter brands, marketers must walk a fine line. Fighter brands must not
be designed to be so attractive that they take sales away from their higher-priced comparison
brands or referents. At the same time, if fighter brands are seen as connected to other brands
in the portfolio in any way, then fighter brands must not be designed so cheaply that they
reflect poorly on these other brands.

 Cash Cows

Some brands may be kept around despite dwindling sales because they still manage to
hold on to a sufficient number of customers and maintain their profitability with virtually no
marketing support. These “cash cows” can be effectively milked by capitalizing on their
reservoir of existing brand equity.

 Low-End Entry-Level or High-End Prestige Brands

Many brands introduce line extensions or brand variants in a certain product category that
vary in price and quality. These sub-brands leverage associations from other brands while
distinguishing themselves on the basis of their price and quality dimensions. In this case, the
end points of the brand line often play a specialized role.

32
Kevin Lane Keller, Strategic Brand Management, Chapter 11.

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The role of a relatively low-priced brand in the brand portfolio often may be to attract
customers to the brand franchise. Retailers like to feature these traffic builders because they
often are able to trade up customers to a higher-priced brand.
On the other hand, the role of a relatively high-priced brand in the brand family often is to add
prestige and credibility to the entire brand portfolio.

In short, brands can play a number of different roles within the brand portfolio based on
considerations related to customers, the competition, and the company. Brand may expand
coverage, provide protection, extend an image, or fulfill a variety of other roles for the firm.
In all brand portfolio decisions, the basic criteria are simple, even through their application
can be quite complicated: each brand name product must have a well-defined role of what is
supposed to do for the firm and, as such, a well-defined positioning as to what benefits or
promises it offers consumers, as encapsulated in the associations that the company would like
it to own or represent in customers’ minds. In that way, brands can maximize coverage and
minimize overlap and thus optimize the portfolio.

6.2 Brand hierarchy

A brand hierarchy is a means of summarizing the branding strategy by displaying the
number and nature of common and distinctive brand elements across the firm’s products,
revealing the explicit ordering of brand elements. By capturing the potential branding
relationships among the different products sold by the firm, a brand hierarchy is a useful
means of graphically portraying a firm’s branding strategy. Specifically, a brand hierarchy is
based on the realization that a product can be branded in different ways depending on how
many new and existing brand elements are used and how they are combined for any one
product. Because certain brand elements are used to make more than one brand, a hierarchy
can be constructed to represent how products are nested with other products because of their
common brand elements may be shared by many products; other brand elements may be
unique to certain products.

As with any hierarchy, moving from the top level to the bottom level typically
involves more entries (in this case, more brands) at each succeeding level. There are different
ways to define brand elements and levels of the hierarchy. The following figure displays a
classification system developed by one of Europe’s leading branding experts, Jean-Noel
Kapferer: 33

33
Jean-Noel Kapferer, Strategic Brand Management (London: Kogan-Page, 1992).

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 Brand Management Process ISITT

Figure 6.4: Kapferer’s Branding System

1. Product brand: assign an exclusive name to a single product to accord the brand
its own individual positioning (e.g., Procter & Gamble’s Ariel, Tide, and Dash
laundry detergents)
2. Line brand: extend the specific concept across different products, allowing for
cross-branding (e.g., Renault automobiles)
3. Range brand: bestow a single name and promise on a group of products having
the same ability (e.g., Green Giant foods)
4. Umbrella brand: support products in markets, each with its own communication
and individual promise (e.g., Canon cameras, photocopiers, and office
equipment)
5. Source brand: similar to an umbrella brand, but the products are directly named
(e.g., Yves Saint Laurent with Jazz perfumed deodorant and various brands of
clothes)
6. Endorsing brand: Give approval to a wide diversity of products grouped under
product brands line brands, or range brands (e.g., General Motors cars)

Perhaps the simplest representation of possible brand elements and thus potential levels of a
brand hierarchy – from top to bottom – might be as follows:

6.2.1 Corporate or company level

A corporate image can be thought of as the associations that consumers have in
memory to the company or corporation making the product or providing the service as a
whole. Corporate image is a particularly relevant concern when the corporate or company
brand plays a prominent role in the branding strategy adopted.

Some marketers believe that a factor increasing in importance in consumer purchase

decisions is consumer perceptions of a firm’s whole role in society, for example, how a firm
treats its employees, shareholders, local neighbours, and others.

The realization that consumers and others may be interested in issues beyond product
characteristics and associations has prompted much marketing activity to establish the proper
corporate image. A corporate image will depend on a number of factors, such as the products
a company make, the actions it takes, and the manner in which it communicates to consumers.
Barich and Kotler identify a host of specific determinants of company image in the following
figure: 34

34
Howard Barich and Philip Kotler, “A Framework for Image Management,” Sloan Management Review
(Winter 1991).

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Figure 6.5: Determinants of Corporate Image

Corporate Social Corporate Corporate Employees’

Conduct Contributions’ Conduct Conduct
 Environment  Charities  Respect
 Citizenship  Schools and universities  Salary
 Quality of life  Arts organizations  Advancement
 Communities

Product
Company Business
 Features
Conduct
 Performance
 Reputation
 Conformance
 Innovation
 Durability
 Financial strength
 Quality
 Management quality
 Reliability
 Repairability
Company Image  Style

Communications
Sales Force
 Advertising
 Size and coverage
 Publicity
 Competence
 Promotions
 Courtesy
 Direct mail
 Reliability
 Telemarketing
 Responsiveness

Distribution Service Support Price

Channels  Installation  Education  List price
 Localizations  Repair quality and  Manuals  Volume discounts
 Services time  Customer training  Rebates
 Competence  Availability of  Consultation  Financial terms
parts

Building and managing a strong corporate brand has additional requirements. For
example, it necessitates that the firm keep a high public profile, especially in terms of
influencing and shaping some of the more abstract types of associations. The chairman or
managing director, if associated with a corporate brand, must be willing to maintain a more
public profile to help to communicate news and information, as well as perhaps provide a
symbol of current marketing activities. At the same time, by virtue of a more visible public
profile, a firm must also be willing to be subject to more scrutiny and be more transparent in
terms of its values, activities, and programs. Corporate brands thus have to be comfortable
with a high level of openness.

6.2.2 Family brand level

Family brands may be used instead of corporate brands for several reasons. As
products become more dissimilar, it may be harder for the corporate brand to be used and still
retain any product meaning or to effectively link the disparate products. Distinct family
brands, on the other hand, can be circumscribed to evoke a specific set of associations across

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a group of related products. As with corporate brands, these associations may relate to
common product attributes, benefits, and attitudes and, perhaps to a lesser extent, people and
relationships, programs and values, and corporate credibility.

Family brands thus can be an efficient means to link common associations to multiple,
but distinct, products. The cost of introducing a related new product can be lower and the
likelihood of acceptance can be higher when an existing family brand is used to brand a new
product. On the other hand, if the product linked to the family brand and their supporting
marketing programs are not carefully considered and designed, the associations to the family
brand may become weaker and less favourable. Moreover, the failure of one product may
have adverse ramifications on other products sold by the firm under the same brand by virtue
of the common brand identification.

6.2.3 Individual brand level

Individual brands are restricted to essentially one product category, although there
may be multiple product types offered on the basis of different models, package sizes,
flavours, and so forth. The main advantage of creating individual brands is that the brand and
all its supporting marketing activity can be customized to meet the needs of a specific
customer group. Thus, the name, logo, and other brand elements, as well as product design,
marketing communication programs, and pricing and distribution strategies, can all be
designed to focus on a certain target market. Moreover, if the brand runs into difficulty or
fails, the risk to other brands and the company itself is minimized. The disadvantages of
creating individual brands, however, are difficulty, complexity, and expense involved in
developing separate marketing programs to build sufficient levels of brand equity.

6.2.4 Modifier level

Regardless of whether corporate, family, or individual brands are employed, it is often
necessary to further distinguish brands according to the different types of items or models
involved. Adding a modifier often can signal refinements or differences in the brand related to
factors such as quality levels, attributes, functions, and so forth. Brand modifiers can play an
important organizing role in communicating how different products within a category that
share the same brand name differ on one or more significant attribute or benefit dimensions.
Thus, one of the uses of brand modifiers is to show how one brand variation relates to others
in the same brand family. As such, brand modifiers play an important role in ensuring market
coverage within a category for the company as a whole. Modifiers help to make products
more understandable and relevant to consumers or even the trade.

6.3 Designing a branding strategy

Given the different possible levels of a branding hierarchy, a firm has a number of
branding options available to it, depending on how each level is employed, if at all. There is n
uniform agreement on the one type of branding strategy that should be adopted by all firms
for all products.

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It is important to note that the brand hierarchy may not be symmetric. Because of
considerations related to corporate objectives, consumer behaviour, or competitive activity,
there may sometimes be significant deviations in branding strategy and how the brand
hierarchy is organized for different products or for different markets. Brand elements may
receive more or less emphasis, or not be present at all, depending on the particular products
and markets involved.

Brand elements at each level of the hierarchy may contribute to brand equity through
their ability to create awareness as well as foster strong, favourable, and unique brand
associations and positive responses. Therefore, the challenge is setting up the brand hierarchy
and arriving at a branding strategy is to design proper brand hierarchy in terms of the number
and nature of brand elements to use at each level and design the optimal supporting marketing
program in terms of creating the desired amount of brand awareness and type of brand
associations in each level. The following figure reviews the decisions related to designing a
brand hierarchy and brand strategy:

Figure 6.6: Guidelines of brand hierarchy decisions 35

1. Decide on the number of levels.

• Principle of specificity: employ as few as possible.
2. Decide on the levels of awareness and types of associations to be created in each
level.
• Principle of relevance: create abstract associations that are relevant across
as many individual items as possible.
• Principle of differentiation: differentiate individual items and brands.
3. Decide to how to link brands from different levels for a product.
• Principle of prominence: the relative prominence of brand elements affects
perceptions of product distance and the type of image created for new
products.
4. Decide on how to link a brand across products.
• Principle of commodity: the more common elements shared by products, the
stronger the linkage.

6.3.1 Number of levels of the brand hierarchy:

The first decision to make in defining a brand strategy is, broadly, which level or
levels of the branding hierarchy should be used. In general, most firms choose to use more
than one level for two main reasons. Each successive branding level that is used allows the
firm to communicate additional, specific information about its products. Thus, developing
brands at lower levels of the hierarchy allows the firm flexibility in communicating the
uniqueness of its products. At the same time, developing brands at higher levels of the
hierarchy such that the brand is applied across multiple products is obviously an economical
means of communicating common or shared information and providing synergy across the
company’s operations, both internally and externally.

The practice of combining an existing brand with a new brand to brand a product is
called sub-branding because the subordinate brand is a means of modifying the super-ordinate
35
Kevin Lane Keller, Strategic Brand Management, (Chapter 11).

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brand. Sub-branding often combines the company or family brand name with individual
brands and even model types. A sub-brand, or hybrid branding, strategy offers two potential
benefits in that it can both facilitate access to associations and attributes regarding the
company or family brand as a whole and, in the same time, allow for the creation of specific
brand beliefs.

The principle of simplicity is based on the need to provide the right amount of
branding information to consumers. In general, the desired number of levels of the brand
hierarchy depends on the complexity of the product line or product mix associated with a
brand and thus the combination of shared and separate brand associations that the company
would like to link to any one product in its product line or mix.

6.3.2 Desired awareness and image at each hierarchy level

Achieving the desired level of awareness and strength, favourability, and uniqueness of
brand associations may take some time and involve a considerable change in consumer
perceptions. Marketing programs must be carefully designed, implemented, and evaluated.
Assuming some type of sub-branding strategy is adopted involving two or more brand levels,
two general principles should guide the brand knowledge creation process at each level.

The principle of relevance is based on the advantages of efficiency and economy. In

general, it is desirable to create associations that are relevant to as many brands nested at the
level below as possible, especially at the corporate r family brand level. The more it is the
case that an association has some value in the marketing or products sold by the firm the more
efficient and economical it is consolidate this meaning into the brand that become linked to all
these products.

The more abstract the association, in general, the more likely it is to be relevant in
different product settings. Thus, benefit associations are likely to be extremely advantageous
associations because they potentially can cut across many product categories.

The principle of differentiation is based on the disadvantages of redundancy. In general, it

is desirable to distinguish brands at the same level as much as possible. If two brands cannot
be easily distinguished, then it may be difficult for retailers or other channel members to
justify supporting both brands. It may also be confusing for consumers to make choices
between them.

6.3.3 Combining brand elements from different levels

When multiple brands are used, each brand element can vary in the relative emphasis it
receives in the combined brand. The prominence of a brand element refers to its relative
visibility compared with other brand elements. For example, the prominence of a brand name
element depends on several factors, such as its order, size, and appearance, as well as its
semantic associations. A name is generally more prominent when it appears first, is larger,
and looks more distinctive.

Along the following lines, Edmund R. Gray and Larry R. Smeltzer define
corporate/product relationships as the approach a firm follows in communicating the
relationship of its products to one another and to the corporate entity. They identified five
categories:

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• Single entity: one product line or set of services is offered such that the image of the
company and the product tend to be one and the same.
• Brand dominance: the strategic decision is made not to relate brand and corporate names.
• Equal dominance: separate images are maintained for products, but each is also
associated with the corporation. Neither the corporate nor the individual brand names
dominate.
• Mixed dominance: sometimes the individual product brands are dominant and sometimes
the corporate name is dominant, and in some cases, they are used together with equal
emphasis.
• Corporate dominance: the corporate name is supreme and applied across a range of
product lines, and communications tend to reinforce the corporate image.

The principle of prominence states that the relative prominence of brand elements affects
perceptions of product distance and the type of image created for new products. That is, the
relative prominence of the brand elements determines which elements become the primary
ones and which elements become the secondary ones. In general, primary brand elements
should be chosen to convey the main product positioning and points of difference. Secondary
brand elements are often chosen for a supporting role to convey a more restricted set of
associations such as points of parity or perhaps an additional point of difference. A brand
secondary element may also facilitate awareness.

6.3.4 Linking brand elements to multiple products

There are many different ways to connect a brand element to multiple products. The
principle of commonality states that the more common brand elements shared by products,
the stronger the linkages between the products.

The simplest way to link products is to use the brand element as is across the different
products involved. Other possibilities exist by adapting the brand, or some part of it, in some
fashion to make the connection. For example, a common prefix or suffix of a brand name
may be adapted to different products. McDonald’s has used its “Mc” prefix to introduce a
number of products, such as Chicken McNuggets, Egg McMuffin, and the McRib sandwich.

A relationship between a brand and multiple products can also be made with common
symbols. For example, corporate brands often place their corporate logo more prominently on
their products than their name, creating a strong brand endorsement strategy.

Conclusion
A branding strategy for a firm identifies which brand elements a firm chooses to apply across
the various products it sell. This chapter described two important tools to help formulate
branding strategies: the brand-product matrix and the brand hierarchy. Combining these tools
with customer, company, and competitive considerations can help a marketing manager
formulate the optimal branding strategy.

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Chapter 7
Brand extensions

Introduction
As background, it is worthwhile to first consider the sources of growth for a firm. One
useful perspective is offered by Ansoff’s product/market expansion grid. As shown in the
following figure, growth strategies can be categorized according to whether they involve
existing or new customers or markets.

Current New
Products Products

Market Product
Current
Penetration Development
Markets
Strategy Strategy

Market
New Diversification
Development
Markets Strategy
Strategy

Figure 7.1: Ansoff’s Growth Share Matrix 36

A brand extension is when a firm uses an established brand name to introduce a new
product (approach 2 or 3). When a new brand is combined with an existing brand (approach
3), the brand extension can also be called a sub-brand. An existing brand that gives birth to a
brand extension is referred to as the parent brand.

Brand extension can be broadly classified into two general categories:

 Line extension: the parent brand is used to brand a new product that targets a new
market segment within a product category currently served by the parent brand. A line
extension often involves a different flavour or ingredient form or size, or a different
application for the brand.
 Category extension: the parent brand is used to enter a different product category from
that currently served by the parent brand.

36
Glen Urban and John Hauser, Design and Marketing of New Products, 2nd ed.

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 Brand Management Process ISITT

Brand extensions can come in all forms. One well-known branding expert, Edward
Tauber, identifies the following seven general strategies for establishing a category (or what
he calls a franchise) extension:

1- Introduce the same product in a different form.

2- Introduce products that contain the brand’s distinctive taste, ingredient, or component.
3- Introduce companion products for the brands.
4- Introduce products relevant to the firm’s perceived expertise.
5- Introduce products that capitalize on the firm’s perceived expertise.
6- Introduce products that reflect the brand’s distinctive benefit, attribute, or feature.
7- Introduce products that capitalize on the distinctive image or prestige of the brand.

7.1 Advantages of extensions

For most firms, the question is not whether the brand should be extended, but when,
where, and how the brand should be extended. Well-planned and well-implemented
extensions offer a number of advantages to marketers. These advantages can broadly be
categorized as those that facilitate new product acceptance and those that provide feedback
benefits to the parent brand or company as whole.

Facilitate new product acceptance

Improve brand image
Reduce risk perceived by customers
Increase the probability of gaining and trial
Increase the promotional expenditures
Reduce costs of introductory and follow-up marketing programs
Avoid cost of developing a new brand
Allow for packaging and labeling efficiencies
Permit consumer variety-seeking

Provide feedback benefits to the parent brand and company

Clarify brand meaning
Enhance the parent brand image
Bring new customers into brand franchise and increase market coverage
Revitalize the brand
Permit subsequent extensions

Figure 7.2: Advantages of Brand Extension 37

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Kevin Lane Keller, Strategic Brand Management, 2nd edition.

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7.2 Disadvantages of brand extensions

However, the brand extension strategy cannot only have advantages. Thus, there are
different disadvantages listed by the following figure:

Figure 7.3: Disadvantages of Brand Extension 38

Can confuse or frustrate consumers

Can encounter retailer resistance
Can fail and hurt parent brand image
Can succeed but cannibalize sales of parent brand
Can succeed but diminish identification with any one category
Can succeed but hurt the image of parent brand
Can dilute brand meaning
Can cause the company to forgo the chance to develop a new brand

7.3 Consumer’s brand extensions evaluation

In analyzing potential consumer response to a brand extension, it is useful t start with a
baseline case in which it is assumed that consumers are evaluating the brand extension based
only on what they already know about the parent brand and the extension category and before
any advertising, promotion, or detailed product information is made available. This baseline
case provides the cleanest test of the extension concept itself and provides managers with
guidance as to proceed with an extension concept and, if so, what type of marketing program
might be necessary.

In evaluating a brand extension under these baseline conditions, consumers can be

expected to use their existing brand knowledge, as well as what they know about the
extension category, to try to infer what the extension of product might be like. In order for
these inferences to result in favourable consumer evaluations of an extension, four basic
assumptions must generally hold true:

• Consumers have some awareness of end positive associations about the parent brand
in memory. Unless there exists some type of potentially beneficial consumer
knowledge about the parent brand, it is difficult to expect consumers to form
favourable expectations of an extension.

• At least some of these positive associations will be evoked by the brand extension. As
will be discussed shortly, a number of different factors will determine which parent
brand associations are evoked when consumers evaluate an extension. In general,
consumers are likely to infer associations similar in strength, favourability, and

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Kevin Lane Keller, Strategic Brand Management, 2nd edition.

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uniqueness to the parent brand when the brand extension is seen as being similar or
close in fit to the parent brand.

• Negative associations are not transferred from the parent brand. Ideally, any negative
associations that do exist for the parent brand would be left behind and not play a
prominent role in the evaluation of the extension.
• Negative associations are not created by the brand extension. Finally, it must be the
case that any attributes or benefits that are viewed positively by consumers with
respect to the parent brand are not seen as a negative in the extension context.
Consumers must also not infer any new attribute or benefit associations that did not
characterize the parent brand but which they see as a potential drawback to the
extension.

The more that these four assumptions hold true, the more likely it is that consumers will
form favourable attitudes toward an extension.

7.4 Brand extension opportunities:

Brand extension strategies must be carefully considered by systematically following the
steps listed as follows: 39

• Define actual and desired consumer knowledge about the brand (e.g., create mental
map and identify key sources of equity).

• Identify possible extension candidates on basis of parent brand associations and

overall similarity or fit of extension to the parent brand.

• Evaluate the potential of the extension candidate to create equity according to the
three-factor model:
 Salience of parent brand associations
 Favorability of inferred extension associations
 Uniqueness of inferred extension associations

• Evaluate extensions candidate feedback effects according to the four-factor model:

 How compelling the extension evidence is
 How relevant the extension evidence is
 How consistent the extension evidence is
 How strong the extension evidence is

• Consider possible competitive advantages as perceived by consumers and possible

reactions initiated by consumers.

• Design marketing campaign to launch extension.

• Evaluate extension success and effects on parent brand equity.

39
Mary W. Sullivan, “Brand Extensions: when to use them,” Management Science 38, no. 6 (June 1992): 793-
806

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7.5 Extension Guidelines:

Brand extension study has received much research attention from academics in recent
years. Some of the important research conclusions that have emerged are summarized as
follows:

• Successful brand extensions occur when the parent brand is seen as having favourable
associations and there is a perception of fit between the parent brand and the
extension product.

• There are many bases of fit: product-related attributes and benefits as well as non-
product-related attributes and benefits related to common usage situations or user
types.

• Depending on consumer knowledge of the product categories, perceptions of fit may

be based on technical or manufacturing commodities or more surface considerations
such as necessary or situational complementarities.

• High-quality brands stretch farther than average-quality brands, although both types
of brand have boundaries.

• A brand that is seen as prototypical of a product category can be difficult to extend

outside the category.

• Concrete attribute associations tend to be more difficult to extend than abstract benefit
associations.

• Consumers may transfer associations that are positive in the original product class
but become negative in the extension context.

• Consumers may infer negative associations about an extension, perhaps even based on
other inferred positive associations.

• It can be difficult to extend into a product class that is seen as easy to make. Some
seemingly appropriate extensions may be dismissed because of the nature of extension
product involved.

• A successful extension can not only contribute to the parent brand image but also
enable a brand to be extended even farther.

• An unsuccessful extension hurts the parent brand only when there is a strong basis of
fit between the two.

• An unsuccessful extension does not prevent a firm from backtracking and introducing
a more similar extension.

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• Vertical extensions can be difficult and often require sub-branding strategies. For
market reasons or competitive considerations, it may be desirable for the firm to
introduce a lower-priced version of a product.

• The most effective advertising strategy for an extension is one that emphasizes
information about the extension.

Conclusion
This chapter examined the role of brand extensions in managing brand evolution. It
outlined the potential benefits and problems of extension strategies, offered some simple
conceptual guidelines to maximize the probability of the extension success, and identified a
process to evaluate brand extension opportunities. Finally, a number of research findings
concerning brand extensions, which deal with factors affecting the acceptance of a brand
extension as well as the nature of the feedback to the parent brand, were summarized in this
chapter.

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Chapter 8
Managing brands over time and markets

Introduction
Increasingly, it is imperative that marketers properly define and control the branding
strategy. A number of factors related to the brand evolution over time and markets are
explained along this chapter.

8.1 Managing brands over time

This section considers how to best manage brands over time. Effective brand management
requires taking a long-term view of marketing decisions. Any action that a firm takes as part
of its marketing program has the potential to change consumer knowledge about the brand in
terms of some aspect of brand awareness or brand image. These changes in consumer brand
knowledge will have an indirect effect on the success of future marketing activities.

Unfortunately, marketers may have a particularly difficult time trying to anticipate

future consumer reactions: if the new knowledge structures that will influence future
consumer response do not exist until the short-term marketing actions actually occur, how can
future consumer response be realistically simulated to permit accurate predictions?

8.1.1 Reinforcing brands

In a general sense, brand equity is reinforced by marketing actions that consistently

convey the meaning of the brand to consumers in terms of brand awareness and brand image.
Questions marketers should consider are as follows:

 What products does the brand represent, what benefits does it supply, and what needs
does it satisfy?
 How does the brand make those products superior? What strong, favourable, and
unique brand associations exist in the minds of consumers?

Both of these issues – brand meaning in terms of products, benefits, and needs as well as
in terms of product differentiation – depend on the firm’s general approach to the product
development, branding strategies, and other strategic concerns.

• Maintaining brand consistency

Without question, the most important consideration in reinforcing brands is the

consistency of the marketing support that the brand receives, both in terms of the amount and

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nature of that support. Brand consistency is critical to maintaining the strength and
favourability of brand associations. Brands that receive inadequate support in terms of
shrinking research and development and marketing communication budgets run the risk of
becoming technologically disadvantaged as well as out-of-date, irrelevant, or forgotten.

From the perspective of maintaining consumer loyalty, inadequate marketing support in a

especially dangerous strategy when combined with price increases.

In terms of qualitative aspects of positioning, an even cursory examination of the brands that
have maintained market leadership for the last 50 or 100 years or so is a testament to the
advantages of staying consistent.

Perhaps an even more compelling demonstration of the benefits of consistency is to

consider the fortunes of those brands that have been inconsistent in their marketing program –
for example, by consistently repositioning or changing ad agencies. One such brand is Burger
King. Since its highly successful mid-1970s “Have It Your Way” campaign that touted the
uniqueness and quality of its hamburgers, Burger King suffered through 20 years of false
starts and wrong turns in brand support.

McDonald’s has employed many different slogans and ad campaigns over the years, but
these advertising efforts all reflected the core values and associations for the brand. For
example, McDonald’s 1995 ad theme, “Have You Had Your Break Today?” was a throwback
to its 1970s ad campaign, “You Deserve a Break Today.” The slogan was a clever way to
capitalize on the good feelings and product meaning embedded in the old slogan – reminding
consumers of the efficiency, convenience, and friendliness of McDonald’s service – while
providing a new twist and stronger call to action. In 2000, McDonald’s adopted a new slogan,
“Smile,” with the refrain “We love to see you smile” – a similar evolution of its brand
promise. 40

In fact, many brands have kept a key creative element in their marketing communication
programs over the years and, as a result, have effectively created some advertising equity.

• Protecting sources of brand equity:

Consistency therefore should be viewed in terms of strategic direction and not necessarily
the particular tactics employed by the supporting marketing program for the brand at any
point in time. Unless there is some change with either consumers, competition, or the
company that makes the strategic positioning of the brand less powerful, there is likely to be
little need to deviate from a successful positioning. Although brands should always look for
potentially powerful new sources of brand equity, a top priority under these circumstances is
to preserve and defend those sources of brand equity that already exist.

Ideally, key sources of brand equity are of enduring value. If so, these brand associations
should be guarded and nurtured carefully. Unfortunately, their value can easily be overlooked
as marketers attempt to expand the meaning of their brands and add new product-related or
non-product-related brand associations.

• Fortifying versus leveraging

40
McDonald’s annual report 1995-2000

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There are a number of different ways to raise brand awareness and create strong,
favourable, and unique brand associations in consumer memory to build consumer-based
brand equity. In managing brand equity, it is important to recognize tradeoffs between those
marketing activities that attempt to fortify and further contribute to brand equity and those
marketing activities that attempt to leverage or capitalize on existing brand equity to reap
some financial benefit.

The advantage of creating a brand with a high level of awareness and positive brand
image is that many benefits may accrue to the firm in terms of cost savings and revenue
opportunities. Marketing programs can be designed that primarily to capitalize on or perhaps
even maximize these benefits. The more that there is an attempt to realize or capitalize on
brand equity benefits, however, the more likely it is that the brand and its sources of equity
may become neglected and perhaps diminished in the process. At some point, failure to fortify
the brand will diminish brand awareness and weaken brand image. Without these sources of
brand equity, the brand itself may not continue to yield as valuable benefits.

• Fine-tuning the supporting marketing program

Although the specific tactics and supporting marketing program for the brand are more
likely to change than the basic positioning and strategic direction for the brand, brand tactics
also should only be changed when there is evidence that they are no longer making the
desired contributions to maintaining or strengthening brand equity.

Performance brand meaning may depend on the nature of brand associations involved.
Several specific considerations play a particularly important role in reinforcing brand meaning
in terms of product-related performance and non-product-related imagery associations, as
follows: 41

 Product-related performance associations:

In making product changes to a brand, it is important that loyal consumers feel that a
reformulated product is a better product but not necessarily a different product. The timing of
the announcement and introduction of a product improvement are also important: if the brand
improvement is announced too soon, consumers may cease to by existing products; if the
brand improvement is announced too late, competitors may have already taken advantage of
the market opportunity with their own introductions.

 Non-product-related imagery associations:

For brand whose core associations are primarily non-product-related attributes and
symbolic or experiential benefits, relevance in user and usage imagery is critical. Because of
their intangible nature, non-product-related associations may be potentially easier to change,
for example, through a major new advertising campaign that communicates a different type of
usage situation. Nevertheless, ill-conceived or too-frequent repositioning can blur the image
of a brand and confuse or perhaps even alienate consumers.

41
Peter H. Farquhar, “Managing Brand Equity,” Marketing Research 1(September 1989)

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8.1.2 Revitalizing brands

As it was noted, changes in consumer tastes and preferences, the emergence of new
competitors or new technology, or any new development in the marketing environment can
potentially affect the fortunes of the brand. In virtually every product category, there are
examples of once prominent and admired brands that have fallen on brand times or, in some
cases, even completely disappeared. Nevertheless, a number of these brands have managed to
make impressive comebacks in recent years as marketers have breathed new life into their
customer franchises.

As many examples illustrate, brands sometimes have had to return to their roots to
recapture lost sources of equity. In other cases, the meaning of the brand has had to
fundamentally change to regain lost ground and recapture market leadership. Reversing a
fading brand’s fortunes thus requires either lost sources of brand equity to be recaptured or
new sources of brand equity to be identified and established. Regardless of which approach is
taken, brands on the comeback trail have to make more revolutionary changes than
evolutionary changes to reinforce brand meaning.

In profiling brand knowledge structures to guide repositioning, it is important to

accurately and completely characterize the breadth and depth of brand awareness; the
strength, favourability, and uniqueness of brand association and brand responses held in
consumer memory; and the nature of consumer-brand relationships. A comprehensive brand
equity measurement system should be able to help reveal the current status of these sources of
brand equity. If not, or to provide additional insight, a special brand audit may be necessary.
Of particular importance is the extent to which key brand associations are still adequately
functioning as points of difference or points of parity to properly position the brand. So, are
positive associations losing their strength or uniqueness? Have negative associations become
linked to the brand?

Revitalization strategies obviously involve a continuum, with pure “back to basics” at

one end and pure “reinvention” at the other end. Many revitalizations combine elements of
both strategies.

With an understanding of the current and desired brand knowledge structures in hand, the
customer-based brand equity framework again provides guidance or to how to best refresh old
sources of brand equity or create new ones to achieve the intended position. According to the
model, two such approaches are possible:

- Expand the depth and breadth of brand awareness, or both, by improving consumer
recall and recognition of the brand during purchase or consumption settings.
- Improve the strength, favourability, and uniqueness of brand associations making up
the brand image. This approach may involve programs directed at existing or new
brand associations.

This section considers several alternative strategies for affecting the awareness and image
of an existing brand to refresh old sources or create new sources of brand equity.

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• Expanding brand awareness

With a fading brand, often it is not the depth of the brand awareness that is a problem
customers can still recognize or recall the brand under certain circumstances. Rather, the
breadth of brand awareness is the stumbling block-consumers only tend to think of the brand
in very narrow ways. Therefore, one powerful means of building brand equity is to increase
the breadth of brand awareness, making sure that consumers do not overlook the brand and
that they will think of purchasing or consuming it in those situations in which the brand can
satisfy consumers’ needs and wants.

Assuming a brand has a reasonable level of consumer awareness and positive brand
image, perhaps the most appropriate starting point for creating new sources of brand equity is
with ways that increase usage. In many cases, such approaches represent the path of least
resistance because they do not involve potentially difficult and costly changes in brand image
or positioning as much as potentially easier-to-implement changes in brand salience and
awareness.

Usage can be increased by either increasing the level or quantity or consumption (i.e.,
how much the brand is used) or increasing the frequency of consumption (i.e., how often the
brand is used).

In general, it is probably easier to increase the number of times a consumer uses the
product than it is to actually change the amount used at any one time. Consumption amount is
more likely to be a function of the particular beliefs that the consumer holds as to how the
product is best consumed. A possible exception to that rule is for impulse consumption
products whose usage increases when the product is made more available (e.g., soft drinks,
snacks).

In some cases, the brand may be seen as useful only in certain places and at certain times,
especially if it has strong brand associations to particular usage situations or user types. In
general, to identify additional or new opportunities for consumers to use the brand more a
marketing program should be designed to include both of the following:

 Communications to consumers as to the appropriateness and advantages of using the

brand more frequently in existing situations or in new situations
 Reminders to consumers to actually use the brand as close as possible to those
situations

For many brands, increasing usage may be as simple as improving top-of-mind awareness
through reminder advertising. In other cases, more creative types of retrieval cues may be
necessary. These reminders may be critical because consumers often adopt functional
fixedness with a brand such that it can be easily ignored in non-traditional consumption
settings.

For example, some brands are seen as only appropriate for special occasions. An effective
strategy for those brands may be to redefine what it means for something to be special.

Finally, perhaps the simplest way to increase usage is when actual usage of a product is
less than the optimal or recommended usage. In this case, consumers must be persuaded of the
merits of more regular usage, and many potential hurdles to increased usage must be

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overcome. In terms of the latter, product designs and packaging can make the product more
convenient and easier to use.

• Improving brand image

Although changes in brand awareness are probably the easiest means of creating new
sources of brand equity, more fundamental changes are often necessary. A new marketing
program may be necessary to improve the strength, favourability, and uniqueness of brand
associations making up the brand image. As part of this repositioning any positive
associations that have been created may have to be neutralized, and additional positive
associations may have to be created. 42

 Repositioning the brand: In some cases, repositioning the brand requires establishing
more compelling points of difference. This may simply require reminding consumers
of the virtues of a brand that they have begun to take for granted. In the same context,
a key point may turn out to be nostalgia and heritage rather than any product-related
difference.

 Changing brand elements: Often one or more brand elements must be changed to
either convey new information or to signal that the brand has changed. Although the
brand name is typically the most important brand element, it is often the most difficult
to change. Nevertheless, names can be dropped or combined into initials to reflect
shifts in marketing strategy or to ease pronounceability and recall. Shortened names or
initials also can disguise potentially negative product associations.

• Entering new markets

Positioning decisions require a specification of the target market and the nature of
competition to set the competitive frame of reference. The target market(s) for a brand
typically do not constitute all possible segments represent potential growth targets for the
brand. Effectively targeting these market segments, however, typically requires some changes
or variations in the marketing program, especially in advertising and other communications,
and the decision as to whether to target these segments ultimately depends on a cost-benefit
analysis.

To grow the brand franchise, many firms have reached out to new customer groups to
build brand equity. Segments on the basis of demographic variables or other means and
identifying neglected segments is thus one available brand revitalization option.

8.2 Managing brands over markets:

An important consideration in managing brand equity is recognizing and accounting for
different types of consumers in developing brand marketing programs. This section examines
in more detail the implications of differences in consumer behaviour and the existence of
different types of market segments for managing brand equity. It pays particular attention to
international issues and global branding strategies.

42
Ronald Alsop, “Giving Fading Brands a Second Chance” Wall Street Journal, 20 October 1994.

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8.2.1 Rationale for going international:

The success of many well-known global brands – Coca-Cola, Shell, Bayer, Rolex,
Marlboro, Pampers, Mercedes-Benz, Apple, and L’Oreal.– have provided encouragement to
many firms to market their brands internationally. A number of other forces have also
contributed to the growing interest in global marketing, including the following: 43

o Perception of slow growth and increased competition in domestic markets

o Belief in enhanced overseas growth and profit opportunities
o Desire to reduce costs from economies of scale
o Need to diversify risk
o Recognition of global mobility of customers

Ideally, the marketing program for a global brand consist of one product formulation, one
package design, one advertising program, one pricing schedule, one distribution plan, and so
on that would turn out to be the most effective and efficient possible option for each and every
country in which the brand was sold.

8.2.2 Advantages of global marketing programs:

A number of potential advantages have been put forth concerning the development of a
global marketing program the greater the extent to which these different advantages will
actually be realized.

• Economies of scale in production and distribution: The primary advantage of global

marketing program is the manufacturing efficiencies and lower costs that drive from
higher volumes in production and distribution.

• Lower marketing costs: The more uniform the branding strategy adopted across
countries, the more potential cost savings should prevail (in packaging, advertising,
promotion, and other marketing communication activities).

• Power and scope: Consumers may believe that selling in many diverse markets is an
indication that a manufacturer has gained much expertise and acceptance.

• Consistency in brand image: Maintaining a common marketing platform all over the
world helps to maintain the consistency of brand and company image.

• Ability to leverage good ideas quickly and efficiently: A global marketer notes that
globalization also can result in increased sustainability and “facilitate continued
development of core competencies with the organization… in manufacturing, in R&D,
in Marketing and Sales, and in less talked about areas such as Competitive
Intelligence… all of which enhance the company’s ability to compete.” 44

43
Michael J. Thomas, Jack R. Bureau, and Narsingh Sanexa, “The Relevance of Global Branding,” /Journal of
Brand Management2, no. 5 (1995)
44
Ian M. Lewis, “Key Issues in Globalizing Brands” (Third Annual Advertising and Promotion Workshop,
Advertising Research Foundation, February 5-6, 1991)

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• Uniformity of marketing practices: Finally, a standardized global marketing program

may simplify coordination and provide greater control of how the brand is being
marketed in different countries.

8.2.3 Disadvantages of global marketing programs:

A number of potential disadvantages of standardized global marketing programs have also
been raised. Perhaps the most compelling criticism is that standardized global marketing
programs often ignore fundamental differences of various kinds across countries and cultures.

• Differences in consumer needs, wants, and usage patterns for products: Marketing
research at one time relevant that the French ate 4 times more yogurt than the British, the
British consumed 8 times more chocolate than the Italians, and Americans drank 11 times
more soft drinks than consumers abroad. Product strategies that work in one country may
not work in another.

• Differences in consumer response to marketing mix elements: In a comparative study of

brand purchase intentions for Korean and U.S. consumers, the purchase intentions of
Americans were twice as likely to be affected by their product beliefs and attitudes toward
the brand itself, whereas Koreans were eight times more likely to be influenced by social
normative beliefs and what they felt others would think about the purchase.

• Differences in brand and product development and the competitive environment: Products
may be at different stages of their life cycle in different countries. Moreover, the
perceptions and positions of particular brands may also differ across countries. The nature
of competition may also differ.

• Differences in the legal environment: At the J. Walter Thompson ad agency, executives

point to a 30-second cereal commercial produced for British TV to show how much
regulations in Europe alone can sap an ad. References to iron and vitamins would have to
be deleted in the Netherlands; a child wearing a Kellogg’s T-shirt would be edited out in
France where children are forbidden from endorsing products on TV. And in Germany,
the line “Kellogg makes their corn flakes the best they’ve ever been” would be axed
because of rules against making competitive claims. After the required changes, the
commercial would be about 5-seconds long.

• Differences in marketing institutions: Channels of distribution, retail practices, media

availability, and media costs all may vary significantly. Foreign companies have struggled
for years to break into Japan’s rigid distribution system that locks out many foreign goods.
China’s primitive logistics – poor roads, jammed rivers, and clogged railways – and
inexperienced, indifferent, and often corrupt middlemen present kind of challenge.

• Differences in administrative procedures: Local managers may suffer from the “not
invented here” syndrome and raise objections that the global marketing program misses
some key dimension of the local market.

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8.2.4 Standardization versus customization:

Perhaps the biggest proponent of standardization is the legendary Harvard professor
Ted Levitt. In a controversial 1983 article, Levitt argued that companies needed to learn to
operate as if the world were one large market, ignoring superficial regional and national
differences:

A thousand suggestive ways attest to the ubiquity of the desire for the most advanced
things that the world makes and sells – goods of the best quality and reliability at the lowest
price. The world’s needs and desires have been irrevocably homogenized. This makes the
multinational corporation obsolete and the global corporation absolute…
But although companies customize products for particular market segments, they know that
success in a world with homogenized demand requires a search for sales opportunities in
similar segments across the globe in order to achieve the economies of scale necessary to
compete. 45

According to Levitt, because the world is shrinking – due to leaps in technology,

communication, and so forth – well-managed companies should shift their emphasis from
customizing items to offering globally standardized products that are advanced, functional,
reliable, and low-priced for all. Levitt’s strong position elicited an equally strong response.

In summary, it is difficult to identify any one company applying the global marketing
concept in the strict sense by selling an identical brand exactly the same way, everywhere.

8.2.5 Building global customer-based brand equity:

This section explores in brief how to best build strong global brands. Specifically, it
shares some common guidelines for success that have emerged in global branding; these
guidelines are encapsulated as the ten commandments of global branding.

1. Understanding similarities and differences in the global branding landscape

• Try to find as many commonalities as possible across markets
• Identify what is unique about different markets
• Examine all aspects of the marketing environment (e.g., stages of brand development,
consumer behaviour, marketing infrastructure, competitive activity, legal restrictions)
• Reconcile the similarities and differences in the most cost-effective and brand-building
manner

2. Don’t take shortcuts in brand building

• Ensure that the brand is being built from the bottom up strategically by creating brand
awareness first before crafting the brand image.
• Ensure that the brand is being build from the bottom up tactically by determining the
appropriate marketing programs and activity for the brand in each market given the
particular strategic goals

3. Establishing marketing infrastructure

• Create the appropriate marketing infrastructure – in terms of manufacturing, distribution,

45
Theodore Levitt, “The Globalization of Markets,” Harvard Business Review (May-June 1983): 92-102

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and logistics – from scratch if necessary

• Adapt to capitalize on existing marketing infrastructure in other countries

4. Embrace integrated marketing communications

• Consider non-traditional forms of communication that go beyond conventional
advertising
• Ensure that all communications are integrated in each market and are consistent with the
brand’s desired positioning and heritage

5. Cultivate brand partnerships

• Form partnerships with global and local partners to improve possible deficiencies in your
marketing programs
• Ensure that all partnerships avoid compromising the brand promise and do not harm the
brand equity in any way

6. Balance standardization and customization

• Be careful to retain elements of marketing programs that are relevant and add value to the
brand across all markets
• Seek to find local adaptations and additions that complement and supplement these global
elements to achieve greater local appeal

7. Balance global and local control

• Establish clear managerial guidelines as to principles and actions that all global managers
must adhere to
• Delineate carefully the areas in which local managers are given discretion and autonomy
in their decision making

8. Establish operable guidelines

• Explicate brand management guidelines in a clear and concise fashion in a document to
be used by all global marketers
• Establish means of seamless communication between headquarters and local and regional
marketing organizations

9. Implement a global brand equity measurement system

• Conduct brand audits when appropriate in overseas markets
• Devise a brand tracking system to provide timely, accurate, and actionable information
on brands in relevant markets
• Establish a global brand equity management system with brand equity charters, brand
equity reports, and brand equity overseers

10. Leverage brand elements

• Check the relevance of brand elements in global markets
• Establish visual brand identities that transfer across market boundaries

Conclusion
Brands are like ships. You could fill a book with analogies. One key common
denominator is that brands, once they gain momentum, overtake agility. A brand heading in

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the right direction absorbs a lot of mishandling before it stops dead in the water, or goes off
course. The selection of the right time and the best place are determinant for the brand to keep
on the rise.

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Part III
McDonald’s, the Fast Food Super-Brand

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Introduction

Brands are powerful symbols that reflect not only the image with which manufacturers and
advertising agencies try to imbue them but also the cultural milieu in which they are
imbedded. If that milieu is qualitatively different from that of the society where the brand
originated, brands can come to represent some surprising ideas and values to which marketing
efforts must be sensitive.

In the previous parts, we dealt with the development, maintenance and growth of
brands in connection with distinct products and services. To complete theory by practice, we
decided to study the case of the leading global foodservice retailer, with more than 30.000
local restaurants serving 52 million people in more than 100 countries each day.

McDonald’s is one of the world’s strongest and most recognizable brands for its
“world’s best quick service restaurant experience” (Vandenbosch and Mark). The purpose of
this case study is affirming that McDonald’s brand extensions into new markets are not
always perceived with the same way of local consumer. We try to evaluate the brand
repositioning options in a particular consumer segment (business schools’ students). In order
for McDonalds to successfully sustain their brand in the local market, they must manage their
growth wisely, rely on the strength of their corporate brand, and consider what their
customers really think their brand is. At the end, they must make sure that the extension of
their brand into new markets brings meaningful perceived value to the consumers they target.

Through this part, we present the McDonald’s corporation and its global brand
strategy, followed by an evaluation of the brand perception by the local customers.

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Chapter 9
McDonald’s Corporation Presentation

McDonald's is the world's largest chain of fast food restaurants, serving nearly 52 million
customers daily. The following chart states some key information 46 about the group:

Figure 9.1: McDonald’s Corporate Presentation

Type Public (NYSE: MCD)

Founded  May 15, 1940 in San Bernardino, California

 McDonald's Corporation, 1955 in Des Plaines, Illinois

Founder  Dick and Mac McDonald: McDonald's restaurant concept

 Ray Kroc: McDonald's Corporation founder.

Headquarters Oak Brook, Illinois, USA

No. of locations More than 31,000 Worldwide

Key people  Andrew J. McKenna Sr. Chairman

 Jim Skinner Vice Chairman & CEO
 Ralph Alvarez, president & COO

Industry Fast Food Restaurants

Products Hamburgers; Chicken; French fries; Soft drinks; Milkshakes;

Salads; Desserts; Breakfast.

Revenue $22.79 billion (2008)

Operating income $14.445 billion (2006)

Net income $3.544 billion (2006)

Employees 1,5 million (2008)

Website www.mcdonalds.com

46
McDonald's publication/ http://www.mcdonalds.ca/en/aboutus/faq.aspx, retrieved 08 May 2008

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9.1 History
The business began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in
San Bernardino, California. Their introduction of the "Speedee Service System" in 1948
established the principles of the modern fast-food restaurant. The present corporation dates its
founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on
April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the McDonald
brothers' equity in the company and led its worldwide expansion.

With the successful expansion of McDonald's into many international markets, the
company has become a symbol of globalization and the spread of the American way of life.
Its prominence has also made it a frequent topic of public debates about obesity, corporate
ethics and consumer responsibility.

9.2 Corporate overview

McDonald's restaurants are found in 119 countries and territories around the world and serve
nearly 52 million customers each day. McDonald's operates over 30,000 restaurants
worldwide (13.700 in USA), employing more than 1.5 million people. The company also
operates other restaurant brands, such as Piles Café, and has a minority stake in Pret a
Manger. The company owned a majority stake in Chipotle Mexican Grill until completing its
divestment in October 2006. Until December 2003, it also owned Donatos Pizza. On August
27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Most standalone McDonald's restaurants offer both counter service and drive-through
service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive,
or McDrive as it is known in many countries, often has separate stations for placing, paying
for, and picking up orders, though the latter two steps are frequently combined; it was first
introduced in Arizona in 1975, following the lead of other fast-food chains. In some countries
"McDrive" locations near highways offer no counter service or seating. In contrast, locations
in high-density city neighborhoods often omit drive-through service. There are also a few
locations, located mostly in downtown districts that offer Walk-Thru service in place of
Drive-Thru.

To accommodate the current trend for high quality coffee and the popularity of coffee
shops in general, McDonald's introduced McCafés. The McCafé concept is a café-style
accompaniment to McDonald's restaurants. McCafé is a concept of McDonald's Australia,
starting with Melbourne in 1993. Today, most McDonald's in Australia have McCafés located
within the existing McDonald's restaurant. In Tasmania there are McCafés in every store, with
the rest of the states quickly following suit. As of the end of 2003 there were over 600
McCafés worldwide.

Some McDonald's in suburban areas and certain cities feature large indoor or outdoor
playgrounds, called "McDonald's PlayPlace" (if indoors) or "Playland" (outdoors). The first

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PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987
in the USA, with many more being constructed soon after. 47

In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their
restaurants, the first major redesign since the 1970s.

The new design includes the traditional McDonald's yellow and red colors, but the red is
muted to terra cotta, the yellow is turning golden for a more "sunny" look, and olive and sage
green is added. To warm up their look, the restaurants have less plastic and more brick and
wood, with modern hanging lights to produce a softer glow. Contemporary art or framed
photographs hang on the walls.

The exterior have golden awnings and a "swish brow" instead of the traditional double-
slanted mansard roof.

The new restaurants feature areas are: 48

• The "linger" zone offers armchairs, sofas, and Wi-Fi connections.

• The "grab and go" zone features tall counters with bar stools for customers who eat
alone; Plasma TVs offers them news and weather reports.
• The "flexible" zone is targeted toward families and has booths featuring fabric
cushions with colorful patterns and flexible seating.
• Different music targeted to each zone.

9.2.1 McDonald's Corporation's business model

McDonald's Corporation earns revenue as an investor in properties, a franchiser of
restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are
owned and operated by McDonald's Corporation directly. The remainder is operated by others
through a variety of franchise agreements and joint ventures.

The McDonald's Corporation's business model is slightly different from that of most
other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are
calculated as a percentage of sales, McDonald's may also collect rent, which may also be
calculated on the basis of sales. As a condition of many franchise agreements, which vary by
contract age, country and location, the Corporation may own or lease the properties on which
McDonald's franchises are located. In most, if not all cases, the franchisee does not own the
location of its restaurants. The UK business model is different, in that fewer than 30% of
restaurants are franchised, with the majority under the ownership of the company.
McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.

In other countries McDonald's restaurants are operated by joint ventures of

McDonald's Corporation and other, local entities or governments.

As a matter of policy, McDonald's does not make direct sales of food or materials to
franchisees, instead organizing the supply of food and materials to restaurants through
approved third party logistics operators.

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McDonald's(R) Unveils R Gym(TM): The New and Fun Way for Kids to Play
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McDonald's wants a digital-age makeover / www.brandchannel.com

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According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers
in the U.S. have at some time been employed by McDonald's. (According to a news piece on
Fox News this figure is one in ten). The book also states that McDonald's is the largest private
operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork,
potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the
host country.

9.2.2 Products
McDonald's predominantly sells hamburgers, various types of chicken sandwiches and
products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's
offers salads and vegetarian items, wraps and other localized fare. This local deviation from
the standard menu is a characteristic for which the chain is particularly known, and one which
is employed either to abide by regional food taboos (such as the religious prohibition of beef
consumption in India) or to make available foods with which the regional market is more
familiar (such as the sale of McRice in Indonesia and McArabia in Middle-East countries).

9.2.3 Trademarks
The following trademarks, and many others, are the property of McDonald’s Corporation and
its affiliates: McDonald’s, Backyard Burger, Big Mac, Big Red French Fry Box Design,
Chicken McNuggets, Chicken Selects, Cinnamon Melts, Egg McMuffin, El Placer Del
Momento, Espresso Pronto, Filet-O-Fish, Golden Arches Logo, Hamburger University,
Happy Meal, i’m lovin’ it, McCafé, MCDirect Shares, McFlurry, McGriddles, McJob,
McSkillet Burrito, Quarter Pounder, Ronald McDonald House Charities, RMHC, Sausage
McMuffin, Snack Wrap, Teriyaki Mac, 100 Yen Menu…

9.2.4 Advertising
McDonald's has for decades maintained an extensive advertising campaign. In addition to the
usual media (television, radio, and newspaper), the company makes significant use of
billboards and signage, sponsors sporting events from ranging from Little League to the
Olympic Games, and makes coolers of orange drink with their logo available for local events
of all kinds. Nonetheless, television has always played a central role in the company's
advertising strategy.

To date, McDonald's has used 23 different slogans in United States advertising, as

well as a few other slogans for select countries and regions. At times, it has run into trouble
with its campaigns.

9.3 McDonald's global brand strategy

McDonald's has become emblematic of globalization, sometimes referred as the
"McDonaldization" of society. The Economist magazine uses the "Big Mac Index": the
comparison of a Big Mac's cost in various world currencies can be used to informally judge
these currencies' purchasing power parity.

The EFTA countries are leading the Big Mac Index with the top 3 most expensive Big
Mac's. Iceland has the most expensive Big Mac, followed by Norway and Switzerland.

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The brand is known informally as "Mickey D's" (in the US and Canada), "Macky D's"
(in the UK and Ireland), "Mäkkäri" (in Finland), "McDo" (in France, Quebec, the Philippines
and the Kansai region of Japan), "Maccer's" (in Ireland), "Macarrannis" (in Mexico),
"Maccas" (in New Zealand and Australia), "McD's" (in New Zealand), "Donken" (in
Sweden), "de Mac" (in the Netherlands), Mäkkes (in Germany), "Mac" (in Brazil and the
Kanto region of Japan) or "Mek" (in Serbia).

Some observers have suggested that the company should be given credit for increasing
the standard of service in markets that it enters. A group of anthropologists in a study entitled
Golden Arches East (Stanford University Press, 1998, edited by James L. Watson) looked at
the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in
Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms,
driving customers to demand the same of other restaurants and institutions. In East Asia in
particular, McDonald's have become a symbol for the desire to embrace Western cultural
norms. McDonald's have recently taken to partnering up with Sinopec, China's second largest
oil company, in the People's Republic of China, as it begins to take advantage of China's
growing use of personal vehicles by opening numerous drive-thru restaurants.

Figure 9.2 : McDonald’s Global Locations 49

• Argentina • Ecuador • Lithuania • Slovenia

• Aruba • Egypt • Malaysia • South Africa
• Australia • El Salvador • Malta • South Korea
• Austria • Estonia • Mauritius • Spain
• Azerbaijan • Fiji • Mexico • Sri Lanka
• Bahamas • Finland • Moldova • Sweden
• Bahrain • France • Morocco • Switzerland
• Bangladesh • Georgia • Netherlands • Syria
• Barbados • Germany • New Zealand • Taiwan
• Belarus • Greece • Nicaragua • Thailand

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http://www.wikipedia.com/McDonald’s.html

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• Belgium • Grenada • Oman • Trinidad and

• Botswana • Guatemala • Pakistan Tobago
• Brazil • Guyana • Panama • Turkey
• Bulgaria • Honduras • Peru • Ukraine
• Canada • Hungary • Paraguay • United Arab
• Chile • Iceland • Philippines Emirates
• People's Republic of • Italy • Poland • United Kingdom
China • India • Portugal o Bermuda
o Hong Kong • Indonesia • Qatar o Cayman
o Macau • Ireland • Romania Islands
• Colombia • Israel • Russia • United States
• Costa Rica • Jamaica • Samoa o Guam
• Croatia • Japan • Saint Lucia o Puerto Rico
• Cyprus • Jordan • Saudi Arabia o United States
• Czech Republic • Kuwait • Serbia Virgin Islands
• Denmark • Latvia • Singapore o American
• Dominica • Lebanon • Slovakia Samoa
• Dominican Republic • Uruguay
• Venezuela
• Yemen
• Zimbabwe

9.3.1 Evolution of the brand:

“When we first began international operations it was essential to emphasize those core
functional attributes, because they were key to establishing McDonald’s position in the
marketplace (…) in the 1970s, when we opened our first restaurant in London, the idea of
service, of eating 100 percent pure beef hamburgers offered at excellent value for money,
in clean surroundings, simply did not exist. The positioning of McDonald’s as a restaurant
which welcomed families, had high-chairs and did not mind if children made a nose, was
new and different.

By the early 1980s, quick service restaurants (QSRs) were being seen as more of a
pressured, utilitarian experience, not one that you could sit back and enjoy. So the brand
went into evolutionary mode, to reassert its competitive edge and address some of the
negative perceptions of the industry by focusing on our relationship with customers.

Then from the late 1980s, as competition from companies like Burger King grew, the
brand strategy began to move again, aiming at a positioning based on the unique role
McDonald’s plays in everyday costumers’ lives. After all, if you look at the total volume
of hamburger restaurant meals consumed, McDonald’s accounts for about three quarters
of them. Alternatively, in the USA, where the competition is more aggressive, heightened
by price-cutting, market share is much lower.

The greatest potential weapon in our armory in terms of building the brand for the
future is to continue to reinforce that emotional connection. It is not through price

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discounting or short-term tactical promotional activity that we increase our brand through
exceptional customer satisfaction and value.” – John HAWKES, senior vice president – 50

9.3.2 McDonald’s brand communication:

The target meaningful value of the McDonald's brand is: "A break for Mom, Mom being
appreciated by the family, and she appreciating the family having fun." So the brand
positioning is not about hamburgers. They are just part of the family fun experience but they
are not part of that target experience. It's an experiential brand positioning.

The Calder model's model for expressing a brand's underlying meaning distinguishes
between: verbal expressions via words and sounds, and visual expressions through pictures
and images that can be seen, touched and even sniffed.

In the next, we try to find how has McDonald's brand equity management "architectured"
the verbal and visual expressions of its targeted brand positioning.

First, the verbalizing that has three component strategies: naming, wording, describing.

In the case of McDonald's, naming included sub-brands like "McDonald's land,"

"PlayPlace," and "Happy Meal." The strategic intent is to provide consumers with
"descriptive or figurative names" for the company and its products or services in order to
reflect some of the corners and lines of the McDonald's brand meaning. It's clear that
PlayPlace is for reflecting McDonald's fun family experience value for the kids and by
extension, for the parents as well.

The wording strategy is somewhat similar to naming but still different enough to be
considered a separate brand design verbalization. Examples for McDonald's are its invented
lexicons such as "McNuggets," "McSpaghetti," or "Big Mac." The strategic intent is to give
consumers a vocabulary where each word takes on a special meaning but all of which adds to
the McDonald's meaningful experiential brand value.

For the describing strategy, good examples from McDonalds include: "You deserve a
break today" or "Love ko 'to." The strategic intent here is to compose sentences or phrases
that distinctively capture the consumer's experiential value of the brand. The "you deserve ..."
sentence is obviously trying to capture the McDonald's experiential value for Mom.

To effectively express and communicate your chosen brand positioning, verbalizing is not
enough. You also need to visualize. There are also three visualizing strategies: picturing,
symbolizing, animating.

In McDonald's, the picturing strategy finds expressions in the photos and drawings of the
merchandised toys shown in in-store posters or display stands as well as the Happy Meal and
soft ice cream Twist McDip photos in the menu board. Here the strategic intent is to illustrate
the brand's underlying experiential meaning with photos or drawings. The examples cited are
all after the McDonald's experiential brand positioning for the kids and their Moms.

McDonald's symbolizing strategy is visualized in the form of the Golden Arches and the

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PlayPlace signage. So the marketers' "symbolizing" strategic intent is to signify meanings via
abstract images including a play with fonts. These visualizations serve to reinforce their
verbalization counterparts.

Finally, the animating strategy in the McDonald's case comes via its mascots from the
main mascot, Ronald, to the supporting mascots of Grimace, Birdie, Hamburglar, etc. Their
strategic intent is to communicate McDonald's brand meaning through the "animating" of
McDonald's brand personalization.

In their totality and combination, these verbalizations and visualizations must express in
some mutually reinforcing manner, the brand meaning. The end result of the six brand
positioning expressions should be synergy. It is the task of the brand design research to test
for any incompatibility between and among the verbalizations and visualizations. Remember
synergy is multiplicative, not additive. A "zero" score in one of the six strategies, render the
entire set equal to zero. The worst case scenario is a "negative" score even in just one
incompatible component. A negative score times a series of positives equals a negative. So,
we have to test and test again. No matter how rough it may be, a good study will always
demonstrate a ton of new things.

9.3.3 The strength of franchising:

One of McDonald’s greatest strengths has always been its approach to franchising. In some
markets, up to 80 percent of the restaurants are owned and operated by independent
entrepreneurs. Almost by definition, if you are franchising to local people the delivery and
interpretation of what might be seen as the culture of US brand is automatically translated by
local people, both in terms of what is delivered and the way it is delivered. The percentage of
franchised restaurants may be lower in other markets, but the franchisees still bring a wealth
of individual flair into the business. They come from a variety of different experiences and
backgrounds, and they may well have been brought up in the local area of their restaurant, so
they’ll know it well. Franchisees typically sign up for twenty years, and because it is their
livelihood they bring a great deal of dedication and energy to a restaurant’s development.

Success in a new market comes largely from listening to the indigenous partners,
franchisees, customers and suppliers. Along with its partners and suppliers, McDonald’s have
invested considerable resources in establishing operations, including the construction of
restaurants, infrastructure, and developing employees and local suppliers. Its aim is to
purchase products required for the restaurants locally; over several years, McDonald’s have
been working with local companies to develop products specifically for the restaurants, by
sharing expertise, technology and equipment of high standard.

The chain menu reflects the local cultural framework: for example, McDonald’s India
offers products developed especially for the Indian market. Big Mac thus becomes Maharaja
Mac, which consists of two all-mutton patties – not beef –, special sauce, lettuce, cheese,
pickles and onions on a sesame seed bun. Israel has some kosher McDonald’s restaurants,
while Saudi Arabia has a restaurant which closes five times a day for Muslim prayer.

The fundamental essence of the menu is important to the brand. It needs to be limited, not
only so it can be served efficiently, but also to keep the quality levels high. Most people
around the world like McDonald’s hamburgers, the French fries and Coca-Cola. Making
changes to account for local tastes is important.

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9.3.4 McDonald’s brand as a living process:

The challenges McDonald’s faces are different, market by market. The USA, for example, is
dealing with issues which other countries can learn from. There are more and more
opportunities for people to eat out, so it is a constant challenge for such QSRs to maintain
market share. Its competition comes not just from other chains, so one of the ways
McDonald’s can grow is by making itself more convenient and taking the brand to where
people congregate by using, for example, mobile restaurants. This approach is part of the
objective to make the McDonald’s brand and position available in more places. Unusual
locations now include airports, hospitals, university campuses and military bases, among
others. McDonald’s food can also be found on airplanes, trains and ships.

There is a great deal of room for growth. Based on the populations of the countries where
the chain currently operates, on a given day McDonald’s still serves only 1 percent of the
population. In China, for example, there are only around sixty restaurants to serve 1.2 billion
people.

“It is fair to say that the business we are in is simple. But managing the brand is not a
simple process. It might be relatively straightforward to sell one Big Mac to one customer.
The skill lies in doing it well 50 million times a day, day in day out, around the world.” – J.
HAWKES, Senior Vice President –

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Chapter 10
The questionnaire results, analysis and
discussion
This section takes an in-depth look at the research results by analyzing the responses of the 10
questions found in the questionnaire (look Appendices). The first section describes the
characteristics of the respondents, while the other three sections, inter alia, deal with brand-
related consumer behavior, Brand awareness and Brand image. The results of this survey are
based on the 95 usable questionnaires, which were completed by the targeted sample of
business schools students. The response rate and usability for each question was exceptionally
good with an average of 94.73%. (The printed number of questionnaires was 100 copies, but
the returned ones were just 95).

Numerous cross tabulations were executed in the aim of identifying significant trends,
preferences and agreements. The most relevant and appealing ones are discussed in this
chapter. Incidentally, the cross tabulations with the use of respondent choices seemed to be
the most fruitful in producing results. To simplify the results and its reading, the use of
“proportion” was preferred over other techniques.

We use to note that direct store comparisons were made each time it was possible. For
example, questions that asked a respondent to compare an explicit attribute between two
convenient statements. Furthermore, the use of tables and graphs were purposely selected for
all the questions in order to exemplify apparent results or trends.

The following comments are the key findings drawn from the analysis of the questionnaire:

10.1 Characteristics of the respondents

Question A was aimed at identifying different groupings within a sample of business schools
students. The main variables used to assess the respondents’ demographic profiles are namely,
age and gender. Each of these demographic characteristics will be addressed as follows.

• Age: Respondents were asked to specify their age in the first part of question A. The
various age groups of the students are shown in the first figure.

• Gender: The second figure gives a breakdown of the number of men and women that
made up the respondent group.

A. I’m …

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ ]18-22] years old 66 69,47%
2/ + 22 years old 29 30,53%
Total 95 100%

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Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Feminine 51 53,68%
2/ Masculine 44 46,32%
Total 95 100%

The first two figures show that 70% of responders are aged from 18 to 22 years old,
whereas only 30% are aged more than 22 years old. We notice that the majority of the
interviewed persons are students in the High International Institute of Tourism in Tangier.
We can note also that the sample is compound of 54% feminine and 46% masculine, from
different nationalities. That means that the respondents were evenly matched with relatively the
same number of men as women.

10.2 Brand-related consumer behavior:

The purpose of questions B & C in the questionnaire dealt with the importance of brand loyalty
for the consumer behavior and the role it plays in the consumer’s buying decisions, in general and
mainly in the field of fast food restaurants.

B. In my daily life I’m:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Very interested 27 28,42%
about brands
2/ Interested about 52 54,74%
brands
3/ Not interested 13 13,68%
about brands
4/ I don’t know 3 3,16%
Total 95 100%

The total response average reveals that about half the interviewed persons are interested about
brands in their daily life. Results that can indicate the sample’s recognition of many favorite
brands for each everyday consumption product.

C. For fast-food and snacks:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ I don’t mind 38 40%
about the brand
2/ I prefer buy a 46 48,42%
well known
brand
3/ I don’t know 11 11,58%
Total 95 100%

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The analysis of these question results displays how consumer’s memory is organized to
choose a fast food restaurant rather than others. The major part of the responders prefer
buying a well-known brand, but a very significant number of them don’t mind about the brand
and prefer consuming the local sandwich shops’ products. We can notice, as a consequence,
the effect of standardization on the fast food branch.

10.3 Brand Awareness:

Brand awareness relates to the likelihood that a brand will come to mind and the ease with
which it does so given different types of cues. The aim of this question is to show how
McDonald’s is known compared to other international fast food restaurant chains.

D. What brands of quick-service restaurant chains are you aware of?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Quick 30 11,41%
2/ KFC 30 11,41%
3/ McDonald’s 95 36,12%
4/ Pizza Hut 86 32,69%
5/ Others 22 08,36%
Total 263 100%

McDonald’s Corporation has held a prominent position in the fast-food market for
much of its existence. A person would be hard pressed to find consumers who would not
readily recognize the famous golden arches, as the company has expanded its market globally.

Figure 10.1: Top fast food brands ranking 51

That’s why 100 % of the interviewed persons recognize that they are aware of the
McDonald’s brand. Compared to other brands it gathers 36.12% of total responses, but we

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have to notice also the immense part of Pizza Hut as the most important rival in the local
market.

10.4 Brand image:

While there is no secret that McDonald's is neither the healthiest nor the tastiest option
available, this study proves that the customers’ negative press hasn't prevented the
McDonald's brand from growing consistently.

10.4.1 Brand strength:

McDonald’s strengths are that: it is ranked as the eighth most valuable brand name in the
world 52, it has experienced brand management and it adapts its offer within cultures and
markets. McDonald’s strategy for its globalization plan has included the concept of localizing
their product (to a degree) for an international market. But to what extent it can work? That is
what we will see in the following.

E. When I say McDonald’s, what are the first associations that come to your mind?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Innovative 24 19,05%
2/ Knowledgeable 26 20,63%
3/ Trustworthy 08 06,35%
4/ Likable 22 17,46%
5/ Concerned about 19 15,08%
their customers
6/ Concerned about 08 06,35%
the society
7/ Admirable 19 15,08%
Total 126 100%

The most ranked responses in this question are:

• 20.23%: McDonald’s is knowledgeable. It means that people are aware of the brand
and they understand what it stands for.
• 19.05%: It is innovative. It deals with the brand ability to adapt its products and
services with the local market’s wants and needs to reinforce such reputation.
• 17.46%: People like it. This has to do with the extent to which consumers like the
brand and hold it in high regard.

By asking this question we were in search of identifying the perception of McDonald’s as

it is found in the mind of each consumer.

Once understanding the high extent of awareness that consumers have of McDonald’s and
the perceived image of its services, it is primordial to measure the usage of the brand by
asking the following question:

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F. Have you eaten in a McDonald’s restaurant in the last week?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Yes 43 45,23%
2/ No 52 54,77%
Total 95 100%

54.77% reported having not eaten in a McDonald’s restaurant in the last week, while
45.23 % claim to have eaten in it. We have to take into account that the purchasing power of
the interviewed students is not appropriate for a regular McDonald’s products’ consumption.
That means that the majority of the sample eats in McDonald’s restaurants but occasionally.

McDonald’s, which has operated successfully for more than 50 years, has recently
become aware of dropping sales which have been attributed to the growing health and
globalization concerns. The plan the marketing team has developed includes a new campaign
that will attempt to reposition the fast-food chain as the best choice for consumers.

The following questions deal with the brand judgment and its effects.

Please indicate your agreement with the following statements (1=strongly disagree;
2=disagree; 3=neither agree nor disagree; 4=agree; 5=strongly agree)

G. How favorable is your attitude toward McDonald’s?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly 18 18,95%
unfavorable
2/ unfavorable 24 25,26%
3/ Neither 25 26,32%
favorable nor
unfavorable
4/ favorable 21 22,10%
5/ Strongly 07 07,37%
favorable
Total 95 100%

The consumers’ attitude in the local market toward McDonald’s brand is rarely favorable
compared to total responses. In fact, we estimated a general favorable attitude toward
McDonald’s restaurants and products because of the rigorous food safety standards, but the
survey results reveal that many other factors merge to generate such negative attitude. We
underline the targeted market (children, teenagers, and families), the management style and
even the rejection of McDonald’s culture, as the main factors.

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H. How well does McDonald’s satisfy your needs?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly 18 18,95%
dissatisfied
2/ Dissatisfied 22 23,16%
3/ Neither satisfied 27 28,42%
nor dissatisfied
4/ Satisfied 16 16,84%
5/ Strongly satisfied 12 12,63%
Total 95 100%

Only 29% of the interviewed persons confirm that McDonald’s satisfy their needs. But
compared to the great number of persons who affirm that they are dissatisfied, McDonald’s
seems to be far of satisfying the needs of the interviewed persons.

Psychological research has shown us that humans are notoriously trusting, positive,
and generally apathetic when it comes to thinking too much about habitual behaviors. So it
takes only a little effort on the part of a big brand, such as McDonald's, to convince us that
everything is OK. By publishing the ingredients in its food, by using point of purchase
displays highlighting its "healthier options", by using bright lighting, open fridges, and by
presenting an argument against the claims made by the films and books, McDonald's is using
a tried and tested psychological theory — often used by large brands in an abundant
marketplace — called bounded rationality. 53

I. How likely would you be to recommend McDonald’s to others?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly not 27 28,42%
recommender
2/ Not recommender 15 15,79%
3/ Neither 26 27,37%
recommender nor
not recommender
4/ Recommender 15 15,79%
5/ Strongly 12 12,63%
recommender
Total 95 100%

According to the figure above, the majority said that they don’t recommend McDonald’s
restaurants to others, or they are not interested about recommending it at all. That can mask
the drop of the McDonald’s loyalty, in general, by the interviewed persons.

Generally, we are creatures of habit in our purchase decisions, and rely on simple
messages, and tap into stereotypes, values and emotions, to help us make sense of a
complicated world. In this situation, put in a position of choosing between something new,

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and something we always eat, we are more than likely to choose the latter. McDonald's has
exploited our desire to simplify our busy, demanding lives and thought processes. In other
words, McDonald’s do not need our commitment to advertise its services.

J. To what extent does thinking of McDonald’s bring back pleasant memories?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly 24 25,26%
disagree
2/ Disagree 24 25,26%
3/ Neither agree 24 25,26%
nor disagree
4/ Agree 13 13,68%
5/ Strongly agree 10 10,54%
Total 95 100%

The promotional program of McDonald’s is designed to keep a very positive reputation of

the brand in the consumer mind, and even to rely some unforgettable ceremonies to
McDonald’s restaurants (we underline here the example of McDonald’s birthdays). But in the
present case, only 24% of responses express the sample’s agreement that thinking of
McDonald’s is bringing back to them pleasant memories. That can be explained by the
cultural paradoxes reflected in brand meaning. Otherwise, the perception of McDonald’s in
Morocco is not the same in the USA or China. Brands can come to represent some cultural
values of which marketing efforts must be aware.

10.4.2 Brand uniqueness:

In this part of the questionnaire we are seeking the McDonald’s brand feelings and
performance.

K. Does McDonalds give you a felling of…?

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Kindness 11 08,87%
2/ Fun 38 30,65%
3/ Pleasure 39 31,45%
4/ Safety 11 08,87%
5/ Social 16 12,90%
appreciation
6/ Self-esteem 09 07,26%
Total 124 100%

This chart illustrates the brand feelings of the interviewed persons. The most frequently
expressed were pleasure (31.45%) and fun (30.65%).

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L. To what extent do you feel the following product characteristics are descriptive of
McDonald’s? (1=strongly disagree; 2=disagree; 3=neither agree nor disagree;
4=agree; 5=strongly agree)

 Has quickly service:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly disagree 12 12,63%
2/ Disagree 07 07,37%
3/ Neither agree nor 09 09.47%
disagree
4/ Agree 15 15,79%
5/ Strongly agree 52 54,74%
Total 95 100%

Results of this question show that the majority (54.74%) of respondents is strongly agree
about the rapidity of McDonald’s service.

 Is for all the family:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly 29 30,53%
disagree
2/ Disagree 07 07,37%
3/ Neither agree nor 13 13,68%
disagree
4/ Agree 18 18,95%
5/ Strongly agree 28 29,47%
Total 95 100%

Most respondents are confused about the targeted market of McDonald’s. A significant
number of respondents’ opinions vary between strongly agree (29.47%) and strongly disagree
(30.53%).

 Has a varied menu:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly disagree 20 21,05%
2/ Disagree 16 16,84%
3/ Neither agree 28 29,47%
nor disagree
4/ Agree 08 08,42%
5/ Strongly agree 23 24,21%
Total 95 100%

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Opinions change from a person to another. Generally speaking, it seems that most
respondents are displeased of McDonald’s menu’s diversity – especially for healthier
varieties.

McDonald's freely admits that the healthier choices make up less than 10 per cent of its
sales. Its main argument is that choice is the key issue in providing new menu items, and that
it is its responsibility to provide as many options as its infrastructure will allow.

 Offers fun promotions:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly 30 31,58%
disagree
2/ Disagree 19 20%
3/ Neither agree nor 21 22,10%
disagree
4/ Agree 10 10,53%
5/ Strongly agree 15 15,79%
Total 95 100%

A large part (31, 58%) of this customers’ segment do not see that McDonald’s is offering
fun promotions because, in fact, the promotional policy if not all marketing strategy is aimed
at young children.

 Has clean facilities:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly disagree 19 20%
2/ Disagree 09 09,47%
3/ Neither agree nor 16 16,84%
disagree
4/ Agree 17 17,89%
5/ Strongly agree 34 35,80%
Total 95 100%

Clean facilities are the means of differentiation for McDonald’s comparing to competitors.
35.80% of customers are satisfied from the cleanness of McDonald’s restaurants.

 Has delicious food:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly disagree 22 23,16%
2/ Disagree 13 13,68%
3/ Neither agree 23 24,21%
nor disagree

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4/ Agree 15 15,79%
5/ Strongly agree 22 23,16%
Total 95 100%

People are confused about the food quality in McDonald’s restaurants. To manage such
situation, McDonald’s products have to change as tastes change.

 Has friendly staff:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly 31 32,63%
disagree
2/ Disagree 13 13,68%
3/ Neither agree nor 12 12,63%
disagree
4/ Agree 18 18,95%
5/ Strongly agree 21 22,11%
Total 95 100%

Standardization in the human resources management makes customers feel that the staff
behavior is not so natural. Even if they are always smiling to customers, a large number of
interviewed persons (32.63%) are strongly disagreeing the statement that McDonald’s staff is
friendly.

 Has a stylish look:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Strongly disagree 17 17,89%
2/ Disagree 14 14,74%
3/ Neither agree nor 17 17,89%
disagree
4/ Agree 14 14,74%
5/ Strongly agree 33 34,74%
Total 95 100%

We cannot say that McDonald’s architecture and décor are old-fashioned but the reality is
that 34.74% of the interviewed students think that they have no stylish look.

According to the Brand Power Study, which looked at a mix of 60 American and
international brands, about half of the 33 U.S. brands listed showed year-over-year decreases
in scores based on three key attributes important to consumers: familiarity, likeability and the
likelihood that consumers would tell others good things about the brand.

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10.4.3 Brand favorability:

The last question was meant to be a measurement of customer’s favorability about
McDonald’s brand.

M. Write Y (yes) or N (no) to indicate your agreement with the following situations:

 I really love McDonalds:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Yes 33 34,74%
2/ No 62 65,74%
Total 95 100%

A big “no” for McDonald’s loyalty and attachment is shown through the responses of
65.74% of the sample. In some countries McDonald’s represents the most heated brand.

This decline in interest and respect for US products was reflected in consumers' view of
American cultural values. A new worldwide study of consumer attitudes has found that the
declining respect for American cultural values exacerbated by the crisis in Iraq is having a
potentially disastrous effect on the image of US brands such as McDonald's.

 McDonald’s is more than a product for me:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Yes 22 23,16%
2/ No 73 76,84%
Total 95 100%

With more than 75% of respondents’ disagreement, another negative response can
mean that McDonald’s is just losing its customer favorability.

McDonald's, one of the world's most successful retailers, is nestling at the bottom of the
Brand Index popularity measures (a leading consumer barometer of over 1000 brands, owned
by You Gov).

 I buy McDonald’s whenever I can:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Yes 34 35,79%
2/ No 61 64,21%
Total 95 100%

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People will only buy if they are sure they are getting value for money. But these question
results confirm that they prefer not buy McDonald’s products when they have other choices.

 I’m proud to have others know I eat at McDonald’s:

Frequency analysis
Answer Count Percent 20% 40% 60% 80% 100%
1/ Yes 23 24,21%
2/ No 72 75,79%
Total 95 100%

The question results approve the drop of McDonald’s customers’ loyalty. They could
play a basic role in advertising, but with 75.79% of interviewed customers saying no for
making others know of their McDonald’s usage, they are giving a negative image of the
brand.

Figure 10.2: U.S. Brands Likability

This was also the finding in the latest brand perception study from market research
firm GfK Roper Consulting. The study tracked consumer attitudes to top global brands in 25
countries. 54

But has this unenviable reputation really damaged sales? Well, a paradox persist
through the efficiency of McDonald's marketing actions, to gain a market share three times
bigger than its main competitor Burger King and even to be rewarded for driving sales with a
high stock price.

54
GFK ROPER Consulting

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Conclusion

Remarkably little work has been done in the marketing field as to the relationship between
brand meaning and the nature of traditional culture, especially where traditional culture is
changing. This should be of paramount importance to marketers, as a brand's image comes
from the interplay between the culture surrounding it and a marketing campaign. If culture is
in a state of flux, brand meaning can also fluctuate. In this research, we related the nature of
societal change to evaluation of a brand by local consumers.

Specifically, this case study reviews one of the world’s strongest brands as judged by
many marketers. McDonald’s key of success has been its capacity to touch universal
consumer needs with such consistency that the essence of the brand has always been relevant
to the local culture, lifestyles and eating habits.

This work investigated how consumers psychologically perceive the McDonald's

brand and how it manages to both engender purchasing behavior change and provide a
medium for carrying on customary ways of interacting.

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General Conclusion

To make matters worse, most companies have the same ideas at the same time. No wonder!
These companies recruit the same type of people, they use the same competitive intelligence,
and they use the same research, consumer insights tools, and models to generate, screen, and
forecast new marketing ideas or strategies.

Successful brands are an important strategic alternative for companies to stand out.
They efficiently transfer to customers the meaning of product and make its identification
easier, as a basis for creating sustained competitive advantage and more victorious strategic
positioning.

Along this report, we presented different steps of development of leading brand

strategies.

This project begun with an initiation into fundamentals of branding, giving a brief
terminology that provides the reader with basic technical background. The first part includes
an overview of different success factors of branding. For this purpose, we outlined the
concept of customer-based brand equity. More formally, we gave first a description of the
sources of brand equity that lie in the minds of consumers and state what they have
experienced and learned about the brand over time – in other words, brand awareness and
brand image.

Starting from this idea, we analyzed and detailed the outcomes arising from the
marketing programs that are able to register the brand in memory and link it to strong,
favorable and unique associations. Consequently, we notified that a number of benefits for the
brand can be realized in terms of greater loyalty, less vulnerability to competitive marketing
actions, increased marketing communication effectiveness and additional brand extension
opportunities.

In the next part, we proposed an effective approach to strong brands positioning and
values establishment. Further, the work described – through the initial choice of the brand
elements, the design of marketing programs and the leverage of the brand secondary
associations – the importance of complementary and consistency in building brand equity.

Then we moved to the measurement system design description. We started with a

general brand value chain overview. Then we depicted in details the need to employ a full
complement of research techniques and processes that capture as much as possible the
richness and complexity of brand equity.

Since a broad, long-term perspective of brands is critically important, we

demonstrated that brand hierarchies must be created that define common and distinct elements
among various nested products. We mentioned that new products and brand extension
strategies also must be designed to determine optimal brand and product portfolios.

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All along the second part we insisted on the extreme shifting and dependent nature of
the brand strategies. To remedy at these issues, we explained how brands and products must
be effectively managed over time and target market segments by creating brand awareness
and a positive brand image, in order to run the risk of confusing or alienating consumers. This
was also the aim of the third part of the report. Therefore, we started with the description of
the McDonald’s corporation and its global brand strategy. Further, we explained how it needs
to be constantly reassessed, in terms of fixing on the best course of action for its brand in
particular markets, based on an analysis of the relevant customers’ perception of the brand.

Since it is about a vast domain that surpasses the framework of this End of Studies
Project, we tried to be as clear as possible in such way to allow anyone who reads the report
to get a general idea about the strategic brand management issues for different types of
products, corporate structures and market segments. This may explain the relative length of
the document.

Personally, we particularly appreciated working on this theme. It was a very enriching

academic experience as much as it was a good exercise of brand strategies achievement. This
allowed us to set in practice some of the knowledge acquired during our studies. All the more,
it was an exceptional occasion to experiment participation in a collaborative work.

Therefore, we plan to continue working on the development of such knowledge, but

also to use it to perform and improve our managerial skills, particularly in the framework of
professional life.

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Bibliography

Websites:
• www.brandchannel.com
• www.allaboutbranding.com
• www.businesslink.com
• www.knowthis.com
• www.brandrepublic.com
• www.businessweek.com
• www.interbrand.com
• www.fastfood.com
• www.mcdonalds,com
• www.mcdonalds.ca
• www.mcdonaldsbrandcenter.com
• www.wikipedia.com
• www.businessweek.com
• www.makeupyourownmind. com.au

Books:
• Alina Wheeler, Designing Brand Identity, a Complete Guide to Creating, Building,
and Maintaining Strong Brands (2003 by John Wiley & Sons, Inc.)

• David A. Aaker & Erich Joachimsthaler, Brand Leadership (2000 by Free Press
Business)

• Harper Collins Business, Brand Warriors, Corporate Leaders Share their Winning
Strategies (1997 edited by Fiona Gilmore)

• Kevin Lane Keller, Strategic Brand Management, Building, Measuring, and

Managing Brand Equity (second edition 2003, by Prentice Hall )

• Scott M. Davis, foreword by David A. Aaker, Brand Asset Management, Driving

Profitable Growth Through Your Brands (2002 by John Wiley & Sons, Inc.)

• Paul Temporal, Advanced Brand Management, From Vision to Valuation (2002 John
Wiley and Sons (Asia) Pie Ltd)

• Dave Sutton and Tom Klein, Enterprise Marketing Management, The New Science of
Marketing (2003 by John Wiley & Sons, Inc.)

Reports and researches (PDF Documents & WebPages):

 Fast Food Nation, Eric Schlosser
 The Tricky Business of Nonprofit Brands, Harvard B-School Working Knowledge
 Make Your Brand Pop, BusinessWeek
 China's Power Brands, BusinessWeek
 Brand That I Love, FastCompany

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 The Decline of Brands, Wired

 A Strong Logo = An Identifiable Brand, Brand Packaging
 How Consumers Value Global Brands, Harvard B-School Working Knowledge
 Licensed Products Still Prevail, Promo Magazine
 Building a Brand on the Touchpoints That Count, Mercer Management
 The Good Brand, FastCompany
 The Best Global Brands, BusinessWeek
 Tangible Marketing: Influencing Customer Choice (product positioning strategy),
Sales & Marketing Management
 Building a Better Brand (the value of building a strong brand), BusinessWeek
 What Makes an Iconic Brand?, MillwardBrown
 High-End Fashion Names at a Low-End Price (new brand for different market), NPR
 Jogging Down the Comeback Trail (trying to revive an old brand of sneaker), San
Diego Union Tribune
 Fine-Tuning a Brand's Signature Sound, BusinessWeek
 Building a Brand Around a Personality, WSJ StartupJournal
 What's in a Name? (considerations when naming products,) BusinessWeek
 What Price a Strong Brand? (estimating brand value), Millward Brown
 Great Brands Never Rest (steps to building strong brands), Target Marketing
Magazine
 Burger King of Cool? (positioning a brand), USA Today
 Brands Produce Their Own Shows, New York Times
 Building a Strong Brand: The ID Branding Framework (extensive article on
components of brand building), AllAboutBranding
 Branding That Makes Scents, BrandChannel
 Best Global Brands (the strategy behind the top global brands), BusinessWeek
 Sticky Branding (different angle on brand loyalty), ClickZ
 Senses Cue Brand Recognition, BrandChannel
 Bring Brands into M&A Discussion (finacial analysis of brands), Mercer Management
Consulting
 Bringing Back Brand Loyalty (consumer electronics industry), ElectronicNews
 Branding, a Job Well Done (non-advertising ways for building brand), BrandChannel
 A Lesson About Branding (creative slogan and logo), WSJ Startup Journal
 How to Build a Breakaway Brand (lessons from 10 companies), Fortune
 Extending an Elite Brand, WSJ Startup Journal
 Obsessive Branding Disorder, FastCompany
 Lose the Jargon, Voice Your Brand (consistent communication), brandchannel.com
 A Bad Move on a New Logo (logo critique), BusinessWeek

Appendices

Annex 1: The 100 top brands ranking 2007 report, Interbrand, JPMorgan Chase &
Co., Citigroup, Morgan Stanley, BusinessWeek
Annex 2: Brand management process questionnaire copy.

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 Rankings

the 100 Top Brands

Here’s how Interbrand calculates the power in a name

I
nterbrand takes many ingredients added because they have begun to differentiate step TWO is calculating how much of
into account when ranking the value of the themselves and create household names. those earnings result from the power of the
Best Global Brands. Even to qualify for the BusinessWeek chose Interbrand’s brand itself. To do this, Interbrand strips out
list, each brand must derive at least a third methodology because it evaluates brand value operating costs, taxes, and charges for the
of its earnings outside its home country, be in the same way any other corporate asset is capital employed to arrive at the earnings
recognizable outside of its base of customers, valued—on the basis of how much it is likely to attributable to intangible assets. The brand’s
and have publicly available marketing and earn for the company in the future. Interbrand role is then estimated within those earnings
financial data. Those criteria eliminate uses a combination of analysts’ projections, vs. other intangible assets such as patents and
heavyweights like Visa, which is privately-held, company financial documents, and its own management strength.
and Wal-Mart, which sometimes operates qualitative and quantitative analysis to arrive at Finally, those future earnings are
under different brand names internationally. a net present value of those earnings. discounted to arrive at a net present value.
Interbrand only ranks the strength of individual step one is calculating how much of a Interbrand discounts against current interest
brand names, not portfolios of brands, which company’s total sales fall under a particular rates and also against the brand’s overall
is why Procter & Gamble doesn’t show up. brand. In some cases the brand encompasses risk profile to factor in brand strength.
Airlines are not ranked because it’s too hard nearly all sales, as with McDonald’s. In others Considerations include market leadership,
to separate their brands’ impact on sales from it is tied to only one set of products: Marlboro stability, and global reach—or the ability to
factors such as routes and schedules. And within Altria Group. Using reports from cross both geographic and cultural borders.
this year, Interbrand removed pharmaceutical analysts at JPMorgan Chase, Citigroup, and The final result values the brand as a financial
brands from the ranking because consumers Morgan Stanley, Interbrand projects five years asset. BusinessWeek and Interbrand believe
typically relate to the product rather than the of sales and earnings tied to each brand’s this figure comes closest to representing a
corporate brand. Insurance companies were products and services. brand’s true economic worth.

RANK 2007 2006 percent Country Description

2007 / 2006 Brand Brand change of
Value Value Ownership
$millions $millions

Still No. 1, but consumers’ shift from soda in the West has hurt Coke. Success
1 1 Coca-Cola 65,324 67,000 –3% U.S.
with Coke Zero hasn’t made up for Coca-Cola Classic’s continued loss of share.
The launch of its Windows Vista operating system, coupled with its Xbox game
2 2 Microsoft 58,709 56,926 3% U.S.
console, keeps the software giant’s latest technology in front of consumers.
Big Blue’s ads promise to make customers feel “special.” With powerful software,
3 3 IBM 57,091 56,201 2% U.S.
servers, and sophisticated services, it’s delivering.
With big bets in China and an accelerating push to go green, GE aims to be the
4 4 GE 51,569 48,907 5% U.S.
earth-friendly global brand.
Nokia built its brand at both ends of the market, with high-end multimedia hand-
5 6 Nokia 33,696 30,131 12% Finland
sets for upscale buyers and low-priced phones for emerging countries.
Quality concerns have increased overall, but Toyota’s reliability and its hybrid
6 7 Toyota 32,070 27,941 15% Japan
strategy are leaving auto rivals trailing.
Intel shored up its position as the world’s leading chipmaker, but sub-brands
7 5 Intel 30,954 32,319 –4% U.S.
such as the Viiv entertainment PC and Core processors failed to resonate.
McDonald’s continues to move beyond its burgers-and-fries image with a growing
8 9 McDonald’s 29,398 27,501 7% U.S.
selection of healthy foods and stylishly remodeled restaurants.
Disney picks franchises it can sell throughout the Magic Kingdom, from movies
9 8 Disney 29,210 27,848 5% U.S.
to theme park rides. The strategy has paid off handsomely.
New models have helped repair a badly dented reputation for quality, but sales are
10 10 Mercedes-Benz 23,568 21,795 8% Germany
up only 1.8% for the first half of the year, trailing gains by rivals BMW and Audi.
The folding of the Citi umbrella logo demonstrates that strong brands can tran-
11 11 citi 23,443 21,458 9% U.S.
scend their visual identity and continue to add value during transitions.
HP last fall edged out Dell as the world’s largest PC maker by market share.
12 13 Hewlett-Packard 22,197 20,458 9% U.S.
Sleek new laptops are helping boost its consumer business.
It hit home runs with its revamp of the 3 Series and the Z4 coupe. But with Mer-
13 15 BMW 21,612 19,617 10% Germany
cedes on the mend and Audi and Lexus coming on, it can’t afford any mistakes.
Its latest brand extension, Marlboro Menthol, is a hit, but smoking bans and the
14 12 Marlboro 21,283 21,350 0% U.S.
threat of higher taxes have hurt.
Although still the preeminent credit-card brand, American Express’ focus on
15 14 American Express 20,827 19,641 6% U.S.
points and co-branded cards could be risky to its long-term brand value.

August 6, 2007 | BusinessWeek | 59

SpecialReport Rankings
RANK 2007 2006 percent Country Description
2007 / 2006 Brand Brand change of
Value Value Ownership
$millions $millions

Gillette owns the men’s shaving category by innovating and spending heavily on
16 16 Gillette 20,415 19.579 4% U.S.
advertising. Future growth depends on the women’s shaving business.
The world’s most powerful luxury brand rolls on, expanding in China and other
17 17 Louis Vuitton 20,321 17,606 15% France
emerging markets as it introduces Vuitton-branded jewelry and eyewear.
Although its presence on the Internet is mostly behind the scenes, the networking giant
18 18 Cisco 19,099 17,532 9% U.S.
continues to invest in pricey image ads in advance of a bigger push into consumer gear.
Small, fuel-efficient cars and big investments in hybrids, “clean” diesels, and
19 19 Honda 17,998 17,049 6% Japan
other green technologies make Honda a darling of the environmentalists.
Despite fears of Google’s growing power as it moves into services beyond search,
20 24 Google 17,837 12,376 44% U.S.
the brand still appeals to consumers and businesspeople.
Samsung is the leader in LCD panels and now No. 2 in mobile phones. But last
21 20 Samsung 16,853 16,169 4% S. Korea
quarter’s results were tepid and next year could be tougher.
Merrill’s push into private equity and Asia solidifies the firm’s position as a global
22 21 Merrill Lynch 14,343 13,001 10% U.S.
brand that spans brokerage, investment banking, and wealth management.
Despite becoming embroiled in the subprime mortgage mess, global demand for
23 28 HSBC 13,563 11,622 17% Britain
credit cards, mortgages, and loans continues to drive growth.
Expanding beyond instant java, Nescafé is introducing upmarket coffee-based
24 23 Nescafé 12,950 12,507 4% Switzerland
drinks. In Europe, it rolled out Dolce Gusto, a coffeemaking machine.
The success of the Sony-Ericsson mobile phones, flat-panel TVs, and digital
25 26 Sony 12,907 11,695 10% Japan
cameras have helped mitigate a rough start with the Playstation 3.
While soft drinks are losing their fizz in the U.S. and Europe, Pepsi remains
26 22 Pepsi 12,888 12,690 2% U.S.
strong in growing markets such as India.
Skeptics had their doubts about Oracle’s expensive acquisitions, but the moves
27 29 Oracle 12,448 11,459 9% U.S.
seem to be paying off.
Its successful expansion across new markets throughout Europe and Asia is a
28 32 UPS 12,013 10,712 12% U.S.
testament to the consistency, strength, and recognition of “Brown,” the brand.
The innovative Nike+ Web site kept Nike on the cutting edge in sports. Mean-
29 31 Nike 12,004 10,897 10% U.S.
while, business is up 40% in India, and China is growing fast, too.
Bud Light sales continued to grow, but the marquee product is under attack from
30 27 Budweiser 11,652 11,662 0% U.S.
imports and increasingly popular U.S. craft brews.
While rivals Apple and HP climb, Dell continues to struggle. The company has
31 25 Dell 11,554 12,256 –6% U.S.
pledged to shake up its consumer unit, recently launching laptops in bright colors.
JPMorgan has been critical to the growth of the hedge fund business, making a
32 33 JPMorgan 11,433 10,205 12% U.S.
risky asset class acceptable to risk-averse investors.
Can you say iPhone? From innovative products to memorable ads, few companies
33 39 Apple 11,037 9,130 21% U.S.
know how to tug the heartstrings of digital consumers the way Apple does.
SAP is penetrating the midsize company market, but its image could be hurt by an
34 34 SAP 10,850 10,007 8% Germany
admission that a U.S. subsidiary improperly downloaded documents from rival Oracle.
Goldman maintains its position as Wall Street’s gold standard, and leads the
35 37 Goldman Sachs 10,663 9,640 11% U.S.
pack by raking in investment banking advisory fees and private investments.
Technology developments in its pro-level cameras and its computer peripherals
36 35 Canon 10,581 9,968 6% Japan
are helping Canon keep its advantage against competitors.
Morgan Stanley is revving up its asset and wealth management services to bring
37 36 Morgan Stanley 10,340 9,762 6% U.S.
more high-octane investments to wealthy individuals.
Swedish for style, Ikea has made design affordable for the masses. A renewed
38 41 Ikea 10,087 8,763 15% Sweden
push into Japan and expansion in China is fueling growth.
The “You & Us” brand campaign attracted high-net-worth individuals to its wealth-man-
39 42 UBS 9,838 8,734 13% Switzerland
agement business. But the departure of the CEO and subprime woes could hurt this year.
Having pledged not to market sugary foods to kids under 12, Kellogg is using its
40 40 Kellogg’s 9,341 8,776 6% U.S.
innovation machine to turn out more nutritious products.
While new CEO Alan Mulally searches for a global CMO, he is selling ill-fitting
41 30 Ford 8,982 11,056 –19% U.S.
luxury divisions to concentrate on the Ford brand worldwide.
After ditching its volatile semiconductors unit, Philips is focused on becoming a
42 48 Philips 7,741 6,730 15% Netherlands
health and lifestyle technology powerhouse.
Improved profitability and a more focused corporate structure is offsetting the
43 44 Siemens 7,737 7,828 –1% Germany
negative effects of a management turmoil caused by a bribery scandal—for now.
The launch of the Wii transformed Nintendo from a quirky also-ran in game
44 51 Nintendo 7,730 6,559 18% Japan
consoles into the market’s innovation leader.

60 | BusinessWeek | August 6, 2007

SpecialReport Rankings
RANK 2007 2006 percent Country Description
2007 / 2006 Brand Brand change of
Value Value Ownership
$millions $millions

Long a brand-management model, Harley is looking to Generation X and Y before

45 45 Harley-Davidson 7,718 7,739 0% U.S.
baby boomers get too old to mount up.
It has come a long way from men’s loafers, with a fast-growing network of global
46 46 Gucci 7,697 7,158 8% Italy
boutiques selling designer Frida Giannini’s knitwear and accessories.
The insurer is pushing harder to make a name. Its sponsorship of Manchester
47 NEW AIG 7,490 New New U.S.
United puts AIG in front of millions of fans throughout Asia and Europe.
As its core auction business has slowed, eBay has used savvy advertising like the
48 47 eBay 7,456 6,755 10% U.S.
“It” campaign to keep its brand current.
A push by this French insurer to raise its profile has paid dividends, as it debuts
49 NEW AXA 7,327 New New France
on the list for the first time this year.
Of all of the Western IT services giants, Accenture has done a superior job at
50 49 Accenture 7,296 6,728 8% Bermuda
using low-cost Indian outfits to accentuate its consulting skills.
The global No. 1 beauty-products company is ringing up healthy sales of skin-care
51 53 L’Oreal 7,045 6,392 10% France
products targeting older women, while experimenting with new ideas.
Despite a slip in U.S. ratings and threats from MySpace, MTV continued to be a
52 50 MTV 6,907 6,627 4% U.S.
leader in defining youth culture, thanks to its global presence.
By focusing on more individual marketing efforts such as art competitions for
53 54 Heinz 6,544 6,223 5% U.S.
ketchup packets, Heinz is giving its brand more personality.
New models are selling in Europe and Asia. But it has to show it can conquer the
54 56 Volkswagen 6,511 6,032 8% Germany
U.S. market with something besides the aging Beetle.
After losing momentum and a CEO during the past 12 months, Yahoo must retool
55 55 Yahoo! 6,067 6,056 0% U.S.
its search ad business and its brand image as well.
Investing in research that will help the paper industry better manage forest land
56 57 Xerox 6,050 5,918 2% U.S.
is Xerox’ attempt to demonstrate environmental responsibility.
Going beyond traditional ads and in-store promotions, Colgate has stepped up
57 58 Colgate 6,025 5,633 7% U.S.
attempts to build relationships with dental professionals.
CEO Maureen Chiquet boosted the consumer-research budget and is targeting
58 61 Chanel 5,830 5,156 13% France
younger customers by selling through avant-garde boutiques.
Strong growth in China and extensions into products such as mints and choco-
59 59 Wrigley’s 5,777 5,449 6% U.S.
lates gave Wrigley’s brand a bump.
China has an appetite for fried chicken, and KFC is now the country’s biggest and
60 60 KFC 5,682 5,350 6% U.S.
fastest-growing restaurant chain, with 2,000 locations.
The once-iconic brand failed to offer either the basics or trendy items that customers
61 52 Gap 5,481 6,416 –15% U.S.
crave. It’s now counting on a former high-end designer to reinvigorate its apparel.
Finally viewed by consumers as the superstore it always tried to be, Amazon is
62 65 Amazon.com 5,411 4,707 15% U.S.
adding cool, participatory Web services that may enhance its brand image.
Although best known for chocolate, it’s counting on other products, including
63 63 Nestle 5,314 4,932 8% Switzerland
baby foods and bottled water, to fuel future growth.
The best-known of Spanish parent company Inditex’ stable of stylish clothing
64 73 Zara 5,165 4,235 22% Spain
brands, Zara is opening stores—more than one a day—across the globe.
A dismal 2005 forced the elimination of 25% of its products and seven layers of
65 62 Avon 5,103 5,040 1% U.S.
management, but ad spending got an 83% boost in 2006.
In addition to building durable equipment, Caterpillar builds customer loyalty by
66 68 Caterpillar 5,059 4,580 10% U.S.
making service calls no matter how tough or remote the terrain.
Despite a nasty legal dispute with its Chinese partner, sales of dairy products and
67 67 Danone 5,019 4,638 8% France
bottled water are booming. It sold its cookie business to Kraft Foods.
A slew of dream machines such as the A5 coupe, TT roadster, and R8 sportscar
68 74 Audi 4,866 4,165 17% Germany
is polishing Audi’s image as a serious rival to BMW and Mercedes.
Building on a boost from the 2006 World Cup in Germany, Adidas showed it
69 71 Adidas 4,767 4,290 11% Germany
could exploit star endorsers like David Beckham on the Internet as well as on TV.
Because it has failed to articulate a difference between the Kleenex brand and
70 64 Kleenex 4,600 4,842 –5% U.S.
other tissues, consumer demand has been waning.
Still the benchmark for luxury watches, its strong performance in China has
71 72 Rolex 4,589 4,237 8% Switzerland
further burnished the brand.
Having improved the quality and reliability of its cars, Hyundai is pushing to go
72 75 Hyundai 4,453 4,078 9% S. Korea
upscale by introducing premium models.
Playing catch-up with Vuitton, the Paris leather-goods house plans to triple its
73 81 HermÈs 4,255 3,854 10% France
network of boutiques in China over the next five years.

62 | BusinessWeek | August 6, 2007

SpecialReport Rankings
RANK 2007 2006 percent Country Description
2007 / 2006 Brand Brand change of
Value Value Ownership
$millions $millions

Americans still love pizza, but the chain hasn’t been able to differentiate itself
74 66 Pizza Hut 4,254 4,694 –9% U.S.
effectively from rivals or competing grocery-store pies.
The revamped 911 sports car and posh $70,000 Cayenne SUV have stoked a
75 80 Porsche 4,235 3,927 8% Germany
10-year winning streak.
CEO Tom Glocer has turned the venerable news-agency-cum-financial-data-pro-
76 78 Reuters 4,197 3,961 6% Britain
vider around and merged it with Thomson making it a big player in data.
Motorola’s failure to follow its Razr with another hit cell phone was exacerbated
77 69 Motorola 4,149 4,569 –9% U.S.
by the death of the company’s chief marketer, Geoffrey Frost, in late 2005.
Panasonic enjoyed robust sales in the plasma TV category. Improved customer
78 77 Panasonic 4,135 3,977 4% Japan
support and product development have also aided the company’s turnaround.
Sales have been hot, thanks largely to cheaper silver jewelry. That could hurt the
79 82 Tiffany & Co. 4,003 3,819 5% U.S.
little blue box’s premium cachet.
It fostered goodwill by plastering its name on a World Cup soccer stadium while
80 NEW Allianz 3,957 New New Germany
sponsoring events such as the 2006 India-Pakistan Cricket Test Series.
Innovative home mortgages and insurance and investment in the Renault F1 team
81 85 ING 3,880 3,474 12% Netherlands
combine a state-of-the-art image with high earnings for this financial institution.
In spite of new digital cameras and entering the ink-jet printer business with
82 70 Kodak 3,874 4,406 –12% U.S.
inexpensive ink technology, the Kodak brand continues to lose luster.
Its ultra-premium jewelry and watches are selling briskly. Cartier is also expand-
83 86 Cartier 3,852 3,360 15% France
ing its range of lower-priced goods such as perfume and sunglasses.
Oil spills in Alaska and a disastrous 2005 refinery explosion in Texas have under-
84 76 BP 3,794 4,010 –5% Britain
mined the promise of “Beyond Petroleum.”
Product innovations, such as smaller package sizes and a new line of Flower
85 87 MÖet & Chandon 3,739 3,257 15% France
Rosé champagnes, helped keep the sparkle in Moët sales.
Kraft has something in the pantry of 199 out of every 200 homes in America.
86 79 Kraft 3,732 3,943 –5% U.S.
Problem is, many of these brands—think Jell-o or Velveeta—are old and tired.
Its popularity with hip-hop singers fueled spectacular growth in recent years, but
87 83 Hennessy 3,638 3,576 2% France
now the cognac needs to find new fans.
With 2,400 new stores opening globally in 2007, Starbucks continues to make
88 91 Starbucks 3,631 3,099 17% U.S.
itself the world’s ubiquitous coffee shop.
World Cup and festival sponsorships have built traction with consumers, but
89 84 Duracell 3,605 3,576 1% U.S.
Duracell faces a tough road. Batteries are a commodity category rife with imitators.
Facing a saturated U.S. market for its famed baby goods, J&J is searching for
90 88 Johnson & Johnson 3,445 3,193 8% U.S.
markets in developing countries such as China and India.
Despite mixed success with new bottled drinks like Raw Tea and Smirnoff Ice,
91 93 Smirnoff 3,379 3,032 11% Britain
Smirnoff continues to be the No. 1 vodka brand worldwide.
New high-powered hybrids keep Lexus at the forefront of the U.S. luxury market,
92 92 Lexus 3,354 3,070 9% Japan
but European and Japan German marques are formidable rivals.
Shell was damaged by a scandal over overstated reserves, but it is back on track
93 89 Shell 3,331 3,173 5% Britain
in a strong oil market. 
Playing on its trendsetting image in Italian-chic bags, shoes, and clothing, Prada
94 96 Prada 3,287 2,874 14% Italy
is pushing the frontier of brand extension with the LG Prada phone.
Revenues and margins are on the rise as the label focuses more on higher-end
95 98 Burberry 3,221 2,783 16% Britain
accessories such as handbags and perfumes, where the margins are big.
Nivea extended its familiar blue-and-white packaging to new products, such as
96 99 Nivea 3,116 2,692 16% Germany
an anti-cellulite cream, while pushing into emerging countries.
The recent launch of super-premium mobile phones is helping LG make an end
97 94 LG 3,100 3,010 3% S. Korea
run around cost wars.
A reliance on larger, less fuel-efficient vehicles has hurt Nissan’s environmental
98 90 Nissan 3,072 3,108 –1% Japan
credentials, but new models may bolster the company’s brand.
On its 40th anniversary, Ralph Lauren’s iconic American fashion brand is looking
99 NEW Polo RL 3,046 New New U.S.
to expand its reach in emerging markets.
After separating Hertz from Ford, private equity owners have been slashing costs.
100 NEW Hertz 3,026 New New U.S.
Travel agents and customers are worried the cutbacks could hurt service.

The brand valuations draw upon publicly available information, which has not been independently investigated by Interbrand. Valuations do not represent a guarantee of
future performance of the brands or companies.
Data: Interbrand, JPMorgan Chase & Co., Citigroup, Morgan Stanley, BusinessWeek

64 | BusinessWeek | August 6, 2007

 Brand Management Process: How to Build,
Measure and Manage Brand Equity.

We are conducting a short interview concerning consumer opinions about McDonald’s

fast-food restaurants chain. This survey represents a crucial part in our dissertation of end of
studies in the 2nd cycle of the High International Institute of Tourism in Tangier.

A. I’m: years old feminine masculine

B. In my daily life I’m: C. For fast-food and snacks:

- Very interested about brands - I don’t mind about the brand
- Interested about brands - I prefer to buy a well-known brand
- Not interested about brands - I don’t know
- I don’t know

D. What brands of quick-service E. When I say McDonald’s, what are the

restaurant chains are you aware of? first associations that come to your
- Quick mind?
- KFC (Kentucky Fried Chicken) - Innovative
- McDonald’s - knowledgeable
- Pizza Hut - Trustworthy
- Others - Likable
- Concerned about their customers
F. Have you eaten in a McDonald’s - Concerned about the society
restaurant in the last week? - Admirable
Yes No

Please indicate your agreement with the following statements: (note from 1 to 5)
G. How favorable is your attitude toward McDonald’s?
H. How well does McDonald’s satisfy your needs?
I. How likely would you be to recommend McDonald’s to others?
J. To what extent does thinking of McDonald’s bring back pleasant memories?

K. Does McDonald’s give you a feeling L. To what extent do you feel the following
of…? product characteristics are descriptive of
- Kindness McDonald’s (1= strongly disagree & 5=
- Fun strongly agree)
- Pleasure Has quick service Has clean facilities
- Safety Is for all the family Has delicious food
- Social appreciation Has a varied menu Has friendly staff
- Self-esteem Offers fun promotions Has a stylish look

M. Write Y (yes) or N (no) to indicate your agreement with the following situations:
I really love McDonald’s McDonald’s is more than a product to me
I buy McDonald’s whenever I can I’m proud to have others know I eat at McDonald’s

We hope that it was an interesting experience and we thank you for your collaboration.

ISITT 2007-2008 / BOURBAB Abdelkader & BOUKILI Mohamed ®